The Federal Reserve announced its interest rate decision in line with expectations, keeping rates unchanged. No statement regarding the interest rate ceiling was made either. This meeting, which is extremely important for cryptocurrency investors, touched upon significant details. Powell has now convinced that it is time for fine-tuning. It is now time to fully see the results of front-loaded interest rates.
Fed and Cryptocurrencies Commentary
Interest rates continue to remain at the highest level in the past 20 years. Although it is still early for the meeting to be held on November 1, the expectation is for rates to remain unchanged. However, the language used by the Fed continued to be cautious about the future of inflation and did not provide a guarantee that conditions would further ease. In particular, the increase in fuel prices caused by OPEC will undermine the decline in inflation.
Bitcoin price had dropped below $26,900 at the time of writing this article. In our current price assessments, we mentioned that closing below $26,800 would have negative consequences for cryptocurrencies. The short-term trajectory of BTC price will shape up in the next few hours.
Expert Opinion
Poppe claimed that there will be no more interest rate hikes in the future. He said that Bitcoin would benefit from this. The FedWatch data also indicates the interest rate ceiling. If the predictions are correct, the interest rate may have reached its peak. However, it should not be forgotten that Powell’s statement tonight, saying that one more hike may be necessary.
Poppe said the following:
“No interest rate hike from the FED. My best guess: we have finished the interest rate hike policy. Bitcoin will probably enter an upward trend from here.”
Markets expecting a cut as of the June 2024 meeting are missing out on the BTC halving event. If there is no impressive improvement in inflation, the first half of next year may not be as great as expected. Historically, October and November are relatively positive. Considering that the next meeting will be held on November 1, the market may want to price in the most positive scenario until the September inflation data. It is important to protect the $26,800 region in the short term.
Oil prices have surpassed $92, and a potential decline here could support the positive movement in crypto. For now, watching what will happen in the next few days will give us a better idea about the route until the November meeting.
