The Fed Rate Decision And BTC’s Price: What To Expect

Fed’s Rate Decision Sparks Anticipation

As the global economic landscape braces for the much-anticipated Federal Reserve interest rate decision, all eyes are on BTC’s price action after the announcement. With a flurry of economic indicators lined up this week, including the Fed’s interest rate decision, investors are keenly interested in whether the leading cryptocurrency will maintain its recent bullish momentum or succumb to bearishness.

Scheduled for March 20, the Federal Reserve’s interest rate announcement will set the stage for the economic trajectory of the United States. Market analysts, especially those at The Kobeissi Letter, predict a 99% guarantee that the Fed will maintain its current interest rates, a sentiment echoed by data from the Chicago Mercantile Exchange.

This expectation marks a significant departure from earlier projections, with markets now foreseeing only three interest rate cuts in 2024, compared to the previously anticipated seven three months ago. This diminishing probability of rate cuts suggests growing optimism despite inflationary pressures, per The Kobeissi Letter.

Notably, the United States isn’t the only one that will announce its interest rate decisions this week. Other major economies slated to announce their respective rate decisions this week include Australia, the United Kingdom, and Japan.

Therefore, analysts expect these simultaneous monetary policy announcements to inject additional volatility into global markets, impacting Bitcoin and other cryptocurrencies. For BTC, the timing of the Fed’s decision couldn’t be more crucial.

Following the recent surge in institutional interest fueled by the launch of spot ETFs in the US, Bitcoin has enjoyed a period of sustained bullish momentum. However, signs of waning enthusiasm emerge as daily ETF inflows taper off, raising concerns on whether BTC can sustain its bullish after the rate announcement.

Danger Zone Looms – Analysts

Meanwhile, renowned crypto trader and analyst Rekt Capital has warned that BTC is entering the “Danger Zone” this week, citing historical precedents before halving events. According to ‘Rekt Capital,’ BTC has historically experienced retracements in the weeks leading to halving events, with previous retracements ranging from 20% to 40%.

With BTC already witnessing a 7.7% decline from its recent all-time high of $73,738, concerns are mounting over further price drops. Accordingly, investors closely monitor key indicators and market sentiment for clues on its next move. With the Fed’s press conference, manufacturing indices, and existing home sales data slated for this week, the financial markets are poised for a significant shift.

Bitfinex Warns Of Mining Power Centralization

Amidst the expectations surrounding Bitcoin’s fourth halving event, the top US crypto exchange has warned that the upcoming halving event could lead to mining power centralization. Bitfinex suggests that smaller miners could face significant financial pressure that will force them out of the market.

This departure of these smaller miners would pave the way for a landscape dominated by publicly traded mining companies, contrasting Bitcoin’s decentralization ethos. Bitfinex further warned that such developments could lead to transaction censorship and susceptibility to regulatory clampdowns.

However, Bitfinex remains optimistic about the halving event’s positive impact on Bitcoin’s price dynamics. By reducing the rate of new coin generation, the halving exacerbates supply scarcity, potentially driving up BTC’s price.

Coinbase Fuels Speculation About BTC’s Price

Meanwhile, leading US crypto exchange Coinbase argues that the fourth halving will not mirror patterns from previous events. The exchange opined that this departure is due to the emergence of spot Bitcoin exchange-traded funds (ETFs), which have established a new demand for BTC, altering the traditional supply-demand dynamics.

Hence, it is no surprise that experts predict that BTC will trade at $80K before the end of this year. Current Coinmarketcap data shows that BTC trades at about $67K, down 2.13% in the last 24 hours.