The global crypto market has now sailed back to the anxiety and curiosity of the FED’s FOMC meet. The amendments of which would go public this coming Wednesday. Whilst novices in the business continue to fret concerns about the implications of the hike. Older hands bother little about the meet, owing to its implications on the higher timeframe.
Crypto industry market capitalization currently revolves around $1.76 billionwhich is on the rise 2.24% throughout the day. Conversely, the FED should raise rates by “50 basis points”. Economic analysts, citizens and investors expressed a neutral rise to around 2.5%.
The Impacts Of FOMC Meet On Cryptocurrencies!
In the FOMC meeting in March, we have seen FED concluding the meeting. By raising the federal funds rate target by 25 basis points. Which was the first FED rate hike since 2018. The market is presently in a similar sentimental environment, as it was in the month of March.
A analyst believes that this event has the potential to change the course of risky markets from bearish to bullish. Or to cause a risk surrender event, depending on the outcome. He thinks a 50 BPS hike has been predicted for weeks now. And the market priced itself accordingly, which left the risks skewed to the upside.
Conversely, the weakness in U.S GDP reduces the probability that we hear, of the FED being merciless. That said if the FED comes off as being more cooperative, with future hikes and balance sheet reduction. We can expect an intense rally in risk and a macro-bottom for the crypto assets could be likely.
What if quantitative tightening is implemented?
If the FED announces “quantitative tightening,” there will be less money for investors and traders to risk on. That said, if the company considers possible aggressive modifications during the encounter. We could see the capitulation drive the price of BTC down to $28,000. The results will reflect on the altcoins.
The U.S equities, crypto, and the USD are all at an inflection point and could show colors after the conference. Successively, it is widely known that the crypto industry has been highly correlated with the U.S tech index. The graph below shows the projection of NASDAQ, following the FED’s Quantitative Tightening on the 20th of September 2017.
In summary, the fact that the rate hike will have implications for the entire crypto industry cannot be ruled out. However, the impacts will be negligible, if any, in a long-term perspective. That said, pullbacks open up opportunities to place buy orders.
