The Federal Open Market Committee (FOMC) meeting is set for 6 PM UTC today, and the crypto market is on edge.
Major cryptocurrencies, especially Bitcoin, ether and XRP will be impacted by the outcome. With Bitcoin ($BTC) currently at $84,490, traders are bracing for major price swings toward $90,000, but this depends on what the Federal Reserve decides about interest rates and monetary policy.
Markus Thielen, CEO of 10x Research, believes Bitcoin might see a short-term rally. He said “We can see some counter-trend rally as prices are oversold, and there is a good chance that the Fed is mildly dovish”
In simple terms, this means Bitcoin has been down for a while, and if the Fed shows signs of being more flexible, prices could recover. If the Fed stays strict and does not lower interest rates or ease its policies, this could impact investor’s decisions and Bitcoin could stay stuck or even drop lower. And based on past experience, if Bitcoin drops, other major cryptos might follow.
However, Fed Chair Jerome Powell recently confirmed that the FED will “remain on hold” due to uncertainty in the economy. This could mean there won’t be any major changes but then investors are still looking for clues. If the Fed talks about ending quantitative tightening (QT) or signals future rate cuts, the market could turn bullish fast.
Right now, the market believes there’s a 99% chance the Fed will keep the interest rate steady, according to the CME Group’s FedWatch tool.
Meanwhile, the crypto market is doing well at the moment. Bitcoin recently dropped to $81K before bouncing back to $84K. Ethereum ($ETH) is holding steady just above $2,000 with an 8% gain recorded in the last 24 hours. XRP is up 13% following the news that the SEC has dropped its lawsuit against Ripple after 4 years.
However, the crypto fear and greed index is currently at 23, which means traders are still unsure whether to buy or sell. One thing is sure, they are waiting on the Fed’s announcement.
Also Read: Why is XRP Up? What is Driving the Pump?
