FOMC Meeting: Bitcoin Price Awaits Fed Rate Cut Decision
Highlights
- Despite Bitcoin price briefly falling below $104K, Bitcoin ETFs have maintained a five-day net inflow streak before FOMC meeting.
- On-chain data indicates short-term holders are selling, while long-term holders remain steadfast.
- Additionally, projections based on M2 money supply suggest Bitcoin could reach $150K by year-end.
Today’s FOMC meeting will be extremely crucial, with Jerome Powell’s decision on Fed rate cuts by the end of 2025, will have a ripple effect across asset classes like crypto, gold, and oil. Based on this, market experts think that the Bitcoin price can swing either under $100K levels, or surge past $110K levels to fresh all-time highs. Currently, BTC is trading above its previous weekly close of $104,000, which serves as a crucial support for the asset class.
FOMC Meeting Crucial for Bitcoin Price Next Direction
Market analysts expect the Fed Chairman Jerome Powell to keep interest rates unchanged during its policy decision today. However, investors will have a close watch on Powell’s future guidance regarding potential Fed rate cuts in the year ahead. So far, market expectations have been for two Fed rate cuts by the year-end.
However, analysts suggest the Fed might reduce rates just once in 2024, a more conservative stance compared to previous expectations. Amid these hawkish expectations, Bitcoin price has already seen a pullback under $104,000 earlier today. If Jerome Powell maintains a hawkish outlook on monetary policy, it might drive the BTC price under $100K.
Conversely, a dovish stance, indicating a softer approach, could spark a rally in financial markets, potentially pushing Bitcoin above the $110,000 mark. Currently, BTC is trading near $105,000 as traders await the Fed’s decision at the FOMC meeting. Altcoin markets remain subdued, reflecting broader caution.
Bitcoin ETF Inflows Have Continued
Despite Bitcoin slipping below $104,000 on Tuesday, Bitcoin ETFs continue to show resilience with BlackRock’s IBIT dominating the flows. The funds have maintained a five-day net inflow streak, with over $1.464 billion flowing into Bitcoin ETFs since June 9, reported Santiment. On-chain data reveals that short-term holders are selling, while long-term holders continue to maintain their positions.
On the other hand, oil price volatility has impacted the global market amid the ongoing Iran-Israel conflict. There’s more than a 10% uptick in the oil price, which has raised concerns that inflation is likely to stay higher. This might even force Powell to cut down on interest rate projections by the year-end.
BTC Price to $150K With M2 Money Supply
Crypto market analysts continue to remain hopeful that BTC will continue to rally following the FOMC meeting. Popular crypto analyst Michael van de Poppe stated:
“The FOMC meeting comes in today, and, usually, that provides the bottom for Bitcoin the day before.It’s standard: risk-off prior to the meeting, risk-on again afterwards”.
Another analyst, Colin Talks Crypto, stated that Bitcoin has always followed the M2 money supply with 80% accuracy.
As shown above, if BTC price follows Global M2, it can reach to $150K level by the year-end. However, it will be interesting to see whether BTC continues with this path or decouples from here.
However, crypto analyst Kevin Capital remains cautious despite this optimism for Bitcoin. In an X post, he stated that not so much has changed for the flagship crypto and that the key remains a successful breakout above $106,800.
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