Crypto Turns Red Ahead Of Major Fed Decision Tomorrow
The crypto market resumes its slide ahead of the interest rate decision tomorrow. Bitcoin has fallen below the $19K mark once again. It fell by more than 11% in the last 7 days. After a small rally, Ethereum is falling once again and is below the $1.35K mark. The altcoins continue to tank as the Fed continues to make macroeconomic conditions remain unfavorable for crypto.
The Federal Reserve will make a major decision tomorrow that will dictate the risk assets market. The Federal Open Market Committee will reach its decision regarding the next interest rate hike. The FOMC is the monetary policy-making body of the Federal Reserve.
According To Bloomberg, the wall street traders are now fully expecting a 75 bps hike and have already priced in a 100 bps hike as well. The CME Fed Watch Tool highlights an 82% chance of a 75 bps hike and an 18% chance of a 100 bps hike.
How Crypto Traders Are Preparing For Major Fed Decision
The majority of crypto traders are completely expecting a 75 bps hike. Many experts believe that a 75 bps hike will actually lead to a crypto rally as it is completely priced in. Indeed, there is historical precedence for this price movement.
In June, when the Fed raised the interest rates by an unusually large 75 bps hike, it led to a bloodbath in the crypto market. Bitcoin had its worst financial quarter in over a decade. However, a similar-sized hike in July had no negative impact on the market. In fact, the markets surged after an initial slide.
JP Morgan is already calling the bottom in the risk assets market. However, if the Fed moves forward with a more hawkish 100 bps hike, the markets can fall again.
When Will The Decision Be Made
The Federal Open Market Committee will decide on the next interest rate hike at the FOMC meeting tomorrow. The decision can be expected to be released at 8:00 AM Eastern Time or 6:30 PM IST.
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