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The cryptocurrency market continues to anticipate the price movements of Bitcoin. With a significant resistance at the $38,000 level, analysts suggest that an influx of capital into Bitcoin could occur if the US Federal Reserve pauses interest rates at its upcoming meeting on December 13.
All Eyes on December
According to analysts at Bitfinex, a potential pause in interest rate hikes could signal an important period for investors. Analysts shared the following statements:
“As indicated by Federal Reserve Governor Christopher Waller’s recent remarks, there is an expectation of a pause in interest rate hikes. A pause in interest rates could lead to more capital flowing into risk assets like Bitcoin.”
The analysis by Bitfinex highlights a speech made earlier this week by Federal Reserve Chairman Chris Waller. In his speech, Waller noted that the slowdown in the US economy’s pace is an encouraging sign and that the current monetary policy is consistent with the Fed’s 2% inflation target. Waller stated in his remarks on November 28:
“Data for October points to a slowdown in economic activities and forecasts for the fourth quarter show a moderation more in line with progress towards reducing inflation.”
Analysts Issue Noteworthy Caution
Waller added to his statements by expressing confidence that the current monetary policy is well-positioned to slow the economy and bring inflation back to 2%. Waller’s comments, combined with CME FedWatch’s prediction that there is a 95% chance of interest rates pausing at the Federal Open Market Committee meeting in December, continues to fuel optimism among analysts. The Fed official further referred to the consumer price index inflation data for October:
“What I wanted to see happened this month: there was no inflation, prices remained almost flat, and the moderation in inflation was more widespread than previous instances where improvements were concentrated in certain goods and services.”
However, Bitfinex analysts emphasized the importance of noting that Waller also warned that inflation remains high. There is uncertainty over whether the trend of slowing will continue. Bitfinex analysts commented:
“Therefore, while a rate pause could boost Bitcoin and other cryptocurrency assets in the short term, the long-term impact will depend on a series of economic factors and the overall direction of monetary policy.”
- Bitcoin awaits a crucial Fed decision.
- Interest rate pause could boost investments.
- Long-term effects remain uncertain.
