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Bitcoin’s Price Raises Concern As Market Stands Divided On Upcoming Interest Rate Hike

Although Bitcoin's price has remained relatively strong during the ongoing market turmoil, upcoming FOMC meet might have new surprises for BTC.
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Bitcoin’s Price Raises Concern As Market Stands Divided On Upcoming Interest Rate Hike

An unexpected drop in wholesale prices was seen in February, which provides some hopeful news regarding inflation at a time when the Federal Reserve is weighing its next step with regard to interest rates. According to a report that was released by the Labor Department on Wednesday, producer price increases (PPI) fell to an annual pace of 4.6% in February, which is a considerable decrease from 6% in January.

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Brewing Market Uncertainty

The cryptocurrency market is currently split on whether or not a rate hike of 25 basis points should be implemented in response to a report indicating cooling inflation — and on the possibility of a no hike due to the ongoing banking crisis. This uncertainty has marginally affected Bitcoin’s price as it slips below $25K leaving investors and traders in the doldrums.

Read More: Top AI Crypto Coins To Buy Amid GPT-4 Release

However, few experts are of the opinion that inflation will continue to persist in the country for the foreseeable future and won’t be eliminated any time soon. Notable crypto expert Michael van de Poppe recently suggested in a tweet that the US inflation is likely to continue, which would result in a drop in Bitcoin’s price before the next meeting of the Federal Open Market Committee (FOMC).

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Bitcoin’s Price To Fall?

Poppe also mentioned that although the CPI and PPI data turned out mostly favorable, there is evidence that inflation would persist for a longer period of time than was anticipated. This in turn could lead to a drop in Bitcoin’s price as the market remains largely uncertain about the Fed’s next move. Furthermore, even though BTC has shown immense strength in the midst of the U.S. banking crisis, speculative trading action could lead to a significant downtick in BTC’s price.

Additionally, it should be noted that BTC’s technical analysis (TA) indicators at CoinGape’s crypto market tracker recommend a “Buy” position as summarised by its moving averages. And, as things currently stand, the price of Bitcoin (BTC) is trading at $24,254 which represents a drop of 4.64% over the past 24 hours, in contrast to a gain of 10.76% recorded over the last seven days.

Also Read: Prominent NFT App Migrates To Hedera From Ethereum; Is HBAR Price Set To Rally?

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Pratik Bhuyan

Pratik has been a crypto evangelist since 2016 & been through almost all that crypto has to offer. Be it the ICO boom, bear markets of 2018, Bitcoin halving to till now - he has seen it all.

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Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
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