Crucial Week Ahead for Crypto: Fed’s Interest Rate Decision, FOMC Meeting, And Binance Vs. SEC Hearing To Capture Attention
The crypto market is preparing for a volatile week, filled with major events that have the potential to shift investor sentiment and alter price trends. From the Federal Reserve’s much-anticipated interest rate decision to the Federal Open Market Committee (FOMC) meeting and the hearing of the legal battle between Binance and the U.S. Securities and Exchange Commission (SEC), all eyes are on these crucial developments next week.
Next Week’s Macro Events And Crypto Market’s Reaction
FOMC Meeting: Will the Fed hike interest rates again in 2023? After ten straight increases and a pause in June, rates rose by 25 basis points in July to 5.25-5.50%. The decision hinges on U.S. CPI data, especially core inflation. August’s CPI rose 3.7% year-on-year, up from July’s 3.2%, while Core CPI was 4.3%, down from 4.7% in July, leaving the Fed and markets uncertain.
When Federal Reserve Chairman Jerome Powell and his team convene next week, they are unlikely to indicate that they’re finished with interest rate hikes. Given that inflation remains above the 2% goal and the economy is robust, U.S. central bankers are expected to maintain a leaning towards stricter policy during their September 19-20 meeting, even if they keep rates unchanged.
Last week’s CPI data failed to bring any significant volatility to Bitcoin. Nonetheless, Fed interest rate announcements are expected to induce a 1% market volatility based on recent trends. At the moment, Bitcoin is trading in the $26K range, comfortably above bearish levels.
Binance Vs. SEC Hearing: A key event on the horizon for next week is the court hearing between Binance and the SEC. A ruling in favor of the SEC could lead to a significant market sell-off, while a decision supporting Binance could ignite a buying demand.
The U.S. SEC recently presented evidence against Binance U.S., highlighting the exchange’s non-compliance with a prior consent order. Binance U.S. has countered, claiming the SEC’s demands in an emergency order are unwarranted.
Last month, the SEC filed confidential documents that caused unrest in the crypto market. They’ve now submitted a “motion to unseal” to reveal these papers. Amidst the ongoing lawsuit, several officials from Binance and Binance U.S. have departed, affecting investor confidence and trading volumes.
The SEC has submitted 31 exhibits to support its motion to compel and oppose Binance U.S.’s request for a protective order. Only 10 of these 31 exhibits were included in the latest filings. The SEC is also asking the court to reject BAM’s plea for a protective injunction. Magistrate Judge Faruqui has scheduled the next hearing for September 18.
On September 15, the SEC moved to unseal or withdraw its previous motion to seal documents related to the Binance case. Both parties have agreed to disclose numerous SEC filings from last month. The SEC has expressed concerns that Binance U.S. (BAM Management and BAM Trading) is not adequately separating its wallets, systems, and personnel from Binance.
If the SEC wins the case, which is expected to extend beyond Gensler’s term, Binance could face hefty fines, operational restrictions, and strict oversight of its BNB token. Additionally, CZ could be permanently banned from running financial firms. With the SEC alleging that Binance U.S. is jeopardizing $2.2 billion of presumably U.S.-based funds, these assets could be seized if linked to illegal activities.
Historically, September is catastrophic for the stock market, but this year’s economic landscape presents a different narrative. Reduced recession concerns, potential shifts in Fed policy, and positive sector trends are painting a picture of strategic investment opportunities. While Wall Street faces uncertainties, Bitcoin is displaying resilience. Federal Reserve Chair Jerome Powell hinted at another rate hike in the upcoming September Federal Open Market Committee (FOMC) meeting.
Bitcoin Holds Its Ground, But What’s Next?
Bitcoin, in the last 24 hours, witnessed significant volatility, swinging from highs of $25,941 to hovering just above the $25,000 mark. This surge in fluctuation aligns with an eagerly awaited legal decision sought by FTX executives in the Delaware bankruptcy court.
The following development is said to be in favor of Bitcoin. The United States is gearing up for pivotal economic data releases, including the Consumer Price Index (CPI) dropping on Wednesday, alongside the Producer Price Index (PPI) and unemployment claims on Thursday. Seems enough fuel to fire up the Bitcoin’s price.
FUD Heating on Rate Hike, Is FED cutting rates? Arthur Says BTC to Go $70K
Looking at the current lined-up events, BitMEX co-founder Arthur Hayes chimed in that a decision by the U.S. Federal Reserve to cut interest rates could rapidly shoot Bitcoin to $70,000. Hayes had previously anticipated this surge post-March, but the Fed raised rates three times since then. He highlights that the Fed’s move to cut rates could be a crucial step in stabilizing the U.S. banking system.
Interestingly, the Fed Chair said the central bank wouldn’t only base future interest rates on inflation. The FOMC would analyze many data points, including inflation patterns.
Hayes emphasized during a keynote at the Korea Blockchain Week conference that Bitcoin’s performance is closely tied to Fed policy and broader macroeconomic factors. Currently, signals indicate an imminent Bitcoin rally, as real rates (US 2-Year Treasury Yields minus nominal GDP growth) are turning positive.
Analysts and market players are still on edge because of the US Fed’s aggressive moves, but there are rumors of a possible rate cut in the new year. If the FOMC stops raising rates after the next meeting, rates might go down at the January 2024 meeting for the first time in more than two years. As of now, Bitcoin is trading at $26,123, marking a 2% increase in the last 24 hours. This surge is attributed to heightened trading activity, with trading volume spiking by 100% in the past day.
Ethereum (ETH), the prominent altcoin, is presently holding a substantial market position as bullish forces have effectively rebounded its price from a crucial support level. As we approach the highly anticipated FOMC meeting, investors are keeping a close eye on Ethereum and the altcoin market due to potential implications. The expectation of a significant interest rate hike by the Fed has led analysts to predict considerable volatility in the price of ETH.
Expectations From Ethereum Following FOMC Meeting
As the financial and crypto markets eagerly await the upcoming Federal Open Market Committee (FOMC) meeting, speculation is rife about its potential impact on Bitcoin and the altcoin market. The FOMC is set to announce its decision on interest rates tomorrow, Wednesday, July 26th, at 2 pm EST, followed by a press conference with Federal Reserve (Fed) Chair Jerome Powell at 2:30 pm EST.
The CME FedWatch tool indicates that a vast majority of the market (98.9%) anticipates a 25 basis point hike. However, the real suspense lies in the aftermath of this decision and whether it signifies the end of the rate increase cycle.
Post tomorrow’s announcement, the market predicts that the Fed will hold the key interest rate high for an extended duration. The earliest possible rate cut is projected for March 2024, if not later in May.
Investors in Ethereum must maintain a balanced perspective. Ethereum has shown recovery against traditional economic events, but it’s not entirely immune to larger macroeconomic trends.
The upcoming FOMC interest rate decision and subsequent statements from Jerome Powell should be closely monitored by investors. Any hints about future rate hikes could have significant implications for Ethereum, possibly leading to further market adjustments.
What’s Next For ETH Price?
Ether’s price rebounded from the $1,830 level, with bulls attempting to drive the price beyond the 20-day Exponential Moving Average (EMA) at $1,865. However, bears are strongly defending a surge above as ETH met multiple rejections. As of writing, ETH price trades at $1,858, surging over 0.6% in the last 24 hours.
Currently, bearish traders are attempting to drag and maintain the price below $1,820, which will pave the way for severe negative movement. If sellers succeed, the ETH price might initiate a correction toward $1,740. This decline would suggest that the price could remain within the $1,650 to $1,750 range for a long period.
However, if the price continues to maintain its current surge and surpasses the 20-day EMA, it would indicate robust buying at lower levels, potentially paving the way for a rally toward $1,904. ETH price might climb toward the $2K level if it breaks above the crucial resistance at $1,978.
Coinbase CEO Brian Armstrong is set to meet with House Democrats in an important closed-door session on Wednesday, July 19. This highly anticipated meeting comes in the wake of a recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against the popular crypto exchange Coinbase.
Brian Armstrong Meets House Democrats Amid Coinbase’s Regulatory Battle
The upcoming meeting between Brian Armstrong and House Democrats on July 19 is generating great interest as it will mark the first time that Armstrong and lawmakers have interacted since the SEC lawsuit was filed. This presents a crucial opportunity for Armstrong to directly address the concerns surrounding the lawsuit and engage in discussions on a range of key topics.
Reports indicate that Armstrong will be engaging in a private conversation with members of the New Democrat Coalition, a group comprising 100 center-left lawmakers. However, Armstrong has been a vocal advocate for clear regulatory frameworks and guidelines for digital assets.
Perhaps, the discussions between Armstrong and House Democrats are expected to focus on a wide range of topics, including the SEC’s lawsuit, the regulatory landscape surrounding cryptocurrencies, and the potential impact on innovation and investor protection. As Coinbase seeks to navigate these challenging circumstances, this meeting presents a pivotal moment for the company to express its perspective and concerns directly to key lawmakers.
As Coinbase operates within the United States, the company has been actively pushing for the consideration of two bills currently circulating in Congress. These bills aim to provide better clarity and guidance for cryptocurrency exchanges when registering with regulatory authorities.
Coinbase Engaged in Legal Battle with SEC and CFTC
The regulatory body (SEC) accused the Coinbase crypto exchange of violating securities laws and failing to register as a securities exchange. Coinbase vehemently denies these allegations and is determined to mount a strong defense.
Additionally, Coinbase is also entangled in a legal battle with the Commodity Futures Trading Commission (CFTC), highlighting the conflicting regulatory landscape surrounding the industry.
Despite these regulatory hurdles, Coinbase has experienced a significant surge in its stock price over the past month. The COIN stock price has skyrocketed by an impressive 142% during this period. This surge has created an opportunity for Ark Invest, as the recent rally provides an exit opportunity for the prominent investment firm.
Furthermore, the meeting underscores the increasing importance of open dialogue and collaboration between cryptocurrency firms and government officials as the industry continues to mature.
In a recent development that has caught the attention of XRP enthusiasts, Mike Novogratz, the CEO of Galaxy Digital, has admitted to being an early investor in Ripple Labs, the cryptocurrency giant. However, Novogratz claims he has held onto his shares for the past ten years and never sold them.
This revelation has sparked a debate within the XRP community, particularly regarding Novogratz’s alleged insider knowledge and his denial of any connection to William Hinman, the former director of SEC’s Corporation Finance.
The Novogratz-XRP Debate
Novogratz’s statement came in response to allegations made by Mr. Huber, a prominent member of the XRP community, who suggested that Novogratz had received insider knowledge about SEC regulations from William Hinman. Novogratz vehemently denied the allegations, stating that he had never met Hinman and had no prior correspondence with him.
Instead, he disclosed that his discussions on SEC matters were limited to Ripple CEO Brad Garlinghouse, who had regular visits to the SEC at the time. Novogratz emphasized his long-standing investment in Ripple Labs and his belief in the company’s potential, highlighting that he had not sold any of his shares since the beginning of his investment journey.
Allegations of Insider Knowledge and Denials: In response to Novogratz’s claims, Mr. Huber dismissed them as mere excuses. He argued that Ripple’s business model heavily relies on XRP and that the company would be just an ordinary software company without the coin.
Huber also pointed out that Ripple’s decision to fight the SEC lawsuit was a clear indication of XRP’s significance. He questioned Novogratz’s investment in Ripple while simultaneously considering XRP a scam, implying that Novogratz’s statements were a form of plausible deniability.
XRP Community Reaction:
Unsurprisingly, XRP enthusiasts have been closely following the back-and-forth debate between Novogratz and Mr. Huber. Yassin Mobark, the founder of Dizer Capital, raised questions about Novogratz’s disparagement of XRP while promoting Ethereum, despite his stake in Ripple. Other prominent XRP supporters also shared their reactions, expressing their thoughts on the situation.
Hinman’s Emails and the Ripple Labs Implications: In the midst of this controversy, members of the XRP community have been analyzing the recently released emails from William Hinman. These emails shed light on internal discussions at the SEC leading up to Hinman’s controversial speech, in which he declared Ethereum as a non-security. The emails revealed that Hinman disregarded warnings from top SEC officials about the speech’s potential to confuse the market and deviate from established regulatory factors.
As the debate continues and the XRP community scrutinizes the revelations surrounding Hinman’s emails, the implications for Ripple Labs and the future of XRP remain uncertain. The allegations of insider knowledge, Novogratz’s investment in Ripple, and the significance of XRP to the company’s business model add complexity to the situation. It will be interesting to see how these developments unfold and how they may impact Ripple Labs and the XRP community moving forward.
The FOMC’s decisions regarding interest rates and policy can have a ripple effect across financial markets, including cryptocurrencies.
This article explores the key factors surrounding the FOMC meeting and analyses their potential implications for Bitcoin. Read on!
FOMC Meeting and Expectations
The FOMC meeting, slated for June 13-14, is expected to maintain the current interest rates and balance sheet policies. Market observers believe that the committee may take a break from its previous rate hikes and quantitative tightening measures, which have been employed to curb inflation and promote economic stability.
Bitcoin’s Price Reaction
Notably, following the previous interest rate increase, Bitcoin experienced a small drop in price. The largest cryptocurrency by market capitalisation was trading at around $28,350, down approximately one percentage point within 24 hours after the previous FOMC decision to increase the interest rate. This clearly indicates that BTC remains highly sensitive to the decisions made by the FOMC.
Influence on BTC and Financial Markets
The FOMC’s actions hold the potential to impact not only Bitcoin but also the broader financial markets. Interest rate changes and policy announcements from the committee can influence investor sentiment, market dynamics, and risk appetite. As cryptocurrencies gain prominence in the financial landscape, their interconnectedness with traditional markets becomes increasingly evident.
Market Expectations and Pause in the Rate Hikes
Market expectations point towards a possible pause in rate hikes and quantitative tightening during the upcoming FOMC meeting. As economic indicators show signs of stability and with no imminent recession in sight, the committee aims to navigate a controlled slowdown, avoiding economic downturns. This anticipation of a pause has generated interest and speculation among investors, particularly those involved in cryptocurrencies.
Insights into Bitcoin’s Price Movement
Investors and market participants eagerly await the FOMC’s announcements during and after the meeting, seeking insights into Bitcoin’s price trajectory. The FOMC’s decisions, along with any statements or indications regarding future monetary policies, will shape market sentiment and influence the demand for Bitcoin and other cryptocurrencies.
As the FOMC meeting unfolds, market participants will closely monitor the committee’s decisions and statements, seeking indications of how Bitcoin’s price may be affected in the near term.
As Bitcoin’s performance falters, DigiToads remains a solid investment option for those waiting for the next FOMC meeting
The recent meeting of the US Federal Open Market Committee (FOMC) sprung quite a few surprises, especially a 5.1% rate hike that no one saw coming. In the aftermath, many analysts suggested investors stay put and wait and watch till the next FOMC meeting that is scheduled in June. Amidst the lull in stock markets. A new cryptocurrency DigiToads has emerged as a dependable option to park your funds. An Ethereum-based meme coin, DigiToads’ key USP is its unique economic design that offers multiple opportunities to earn passive income and bag crypto records. Plus, they are also plugging the gap left behind by a faltering Bitcoin.
DigiToads: The best crypto for beginners in 2023
DigiToads has been designed with a hybrid economic framework that channels the utility of three cryptocurrencies – a meme token, a stake-to-earn platform, and a Web 3.0 game. Apart from staking NFTs and trading tokens, users can explore opportunities like winning crypto tokens in Web 3.0 games, entering giveaways, participating in trading competitions, and even receiving rewards for holding tokens. The DigiToads team has rolled out a native token, TOADS, which can be used for staking, swapping tokens, buying NFTs, and purchasing in-game assets, among other things. Available on presale, the team doesn’t intend to use the entire supply of TOADs tokens – 585 million – for presale. Instead, the supply will be used for various tasks including organizing competitions, maintaining the liquidity pool, organizing competitions, team tokens, public presales, and other miscellaneous use cases.
For those interested in learning about cryptocurrency for beginners, DigiToads serves as a good option because of its user-friendly interface and lucrative awards system. For instance, rewards would be airdropped in the wallets of TOADS token holders every month. Moreover, its Web 3.0 game is a great way to boost your crypto earning while keeping yourself entertained. In the game, players get down into a Metaverse swamp, which is designed like an arena, and try to outperform their competitors. They take help from DigiToads, who are digital creatures with special abilities. The winners are announced after the season ends and they are given TOADS tokens as a reward.
Another opportunity that has boosted DigiToads’ popularity as one of the best crypto for beginners in today’s market is its monthly trading competitions. In these competitions, the team would be rewarding participants who book the highest trade volume in a month. Apart from getting to keep 10% of the earnings, the winners also get a chance to learn about managing the DigiToads treasury fund. Once they perfect their skills, they will be helping the team in doing the job.
The team plans on donating a portion of the annual profits every year to support the cause of rainforest preservation. For the donations, the team would be reserving 2.5% of the annual profits. Meanwhile, the organizations benefiting from these donations would be selected by the community members each year.
A bearish pattern for Bitcoin? Here’s what analysts are saying
More than a decade after its launch, Bitcoin is still among the top crypto coins. Bitcoin is a peer-to-peer blockchain network that supports cryptocurrencies and dApps. Its native token is BTC and it has chosen the proof-of-work consensus algorithm. What makes Bitcoin a good crypto to buy is the public confidence it enjoys. Being one of the first cryptocurrencies that were adopted for practical uses, Bitcoin’s brand equity paved the way for many crypto tokens. However, the BTC token has been grappling with price hurdles over the past few weeks. Citing bearish patterns, analysts feel that Bitcoin is likely to stay in the red for the short term.
Though Bitcoin is among the leading cryptocurrencies of the world, DigiToads has been fast emerging as a sustainable long-term option in a market that’s in turmoil after the US Fed rate hike. The analysts who have reviewed the TOADS token have lauded its versatility and they feel that by enabling token holders to explore multiple options for earning residual income, the platform will be able to help them build a steady source of income. Going by its presale success where it has raised over $3.2 million till now, market experts feel that DigiToads can potentially surge by 40x in the coming months.
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The Ripple vs SEC lawsuit has been one of the most consequential legal battles in the crypto industry. All eyes are fixed on the outcome of this case as it will set the precedent for cryptocurrency regulations in the United States. The summary judgement was initially expected to be delivered in the first quarter, but uncertainty now looms as to when Judge Analisa Torres will issue her verdict.
In the absence of concrete information, the XRP community is left to rely on predictions and rumours. What’s the latest? Let’s explore.
Are Ripple and SEC Meeting In Secret?
Recently, a prominent XRP influencer with the Twitter handle @Leerzeit, known as Mr. Huber, posted a tantalising rumour that Judge Analisa Torres would be delivering her verdict after her summer vacation in 2024, following two undisclosed meetings with Ripple and the SEC.
This tweet has garnered significant attention from the XRP community, who are eagerly anticipating the end date of this high-profile lawsuit. With speculation running rampant, Huber’s tweet has only added to the intrigue and curiosity surrounding the case.
Settlement Rumours Run Wild
Anticipation for the verdict has been rapidly increasing in the XRP community, causing various unverified rumours to circulate. Recently, the news outlet Blockchain Daily shared a speculative report on a possible settlement, citing a meeting scheduled for May 8, 2023, between Ripple and SEC officials.
However, pro-XRP lawyer John E. Deaton disputed the rumour, stating that it would be highly unlikely for both parties to hold a meeting so soon after the announcement and also leak the information to the public.
The XRP community eagerly awaits the final verdict of the SEC vs Ripple lawsuit. Previous predictions by lawyers on the end date did not come true. Only Judge Torres and her staff will know when the ruling will be released. Ripple CEO and Ripple itself have predicted that the verdict will be released in the first half of 2023 or before the end of the year.
Mr Huber’s tweet has sparked reactions from the XRP community, with some members joking about the possibility of the ruling being delayed beyond 2024. Others have suggested that a new SEC chairman may be in place by the time the verdict is announced. These reactions are indicative of the level of anticipation and speculation surrounding the outcome of the lawsuit.
The meeting of legal giants, Coinbase and Ripple, has sent shockwaves throughout the crypto industry. As both companies continue to grapple with the U.S. Securities and Exchange Commission (SEC) over regulatory clarity, speculation is rife that Coinbase may be considering relisting XRP.
Coinbase’s Chief Legal Officer, Paul Grewal, took to social media to express his satisfaction with the meeting, stating the need for more meetings in the future. In response, Ripple’s Chief Legal Officer, Stuart Alderoty, expressed his appreciation for the opportunity to converse with Coinbase’s legal team.
What secrets could have been exchanged during this mysterious meeting? Could there be a groundbreaking collaboration between the two crypto powerhouses? Only time will tell.
Meanwhile, the SEC battle rages on. Coinbase has filed a lawsuit against the SEC, demanding clarity on the proposed regulations governing the digital securities industry. Ripple Labs and its executives await the summary judgment in their long-running lawsuit with the SEC.
In a lighthearted tweet, attorney Jeremy Hogan joked about the meeting, suggesting the possibility of a playful exchange between the two legal teams. As the crypto industry eagerly awaits an update, the playful tweet has added an intriguing layer to the ongoing drama surrounding the SEC’s regulatory battle with Coinbase and Ripple. It remains to be seen whether there is any substance to the joking suggestion or if it is merely a light-hearted exchange between the legal teams.
Why are Hinman emails important to Ripple?
The Hinman emails refer to a series of messages that were allegedly exchanged between William Hinman, the former director of the SEC’s Division of Corporation Finance, and other SEC officials. The emails are significant in the SEC’s case against Ripple because they reportedly discuss the agency’s views on the regulatory status of cryptocurrencies and whether certain digital assets, including XRP, should be considered securities.
Ripple’s legal team has been seeking access to these emails as part of its defense in the ongoing lawsuit with the SEC. The company hopes that the emails will provide evidence that the SEC’s own officials had previously stated that XRP was not a security, which would weaken the SEC’s case against Ripple.
As the industry’s eyes remain firmly fixed on this ongoing regulatory drama, the meeting between Coinbase and Ripple’s legal chiefs could prove to be a game-changer
The Bitcoin market has recently experienced a heart-stopping tumble, with its price flirting dangerously close to the $28,000 mark. The nosedive from $30K has already sent shockwaves through the market, triggering fears of a massive correction. As the Federal Open Market Committee (FOMC) meeting approaches, investors are holding their breath, waiting to see how the Fed’s decision will impact the already volatile cryptocurrency market.
Upcoming FOMC Meeting Is Set To Shake Up BTC Price
The US Federal Reserve is anticipated to increase interest rates by 25 basis points, reaching a range of 5% to 5.25%, the highest level seen since 2007. The crucial FOMC meeting is scheduled for May 2-3, with Fed Chairman Powell set to make the announcement on May 3.
As the week commenced, Asian markets experienced a potential volatility trigger when the U.S. government sold First Republic Bank to JPMorgan Chase. Concerns about the legitimacy of the transaction led to First Republic becoming the second-largest bank failure in U.S. history.
Contrary to its response to the beginning of the banking crisis in March, Bitcoin displayed minimal interest in emulating this situation. Instead, it continued to trend downward, despite cautionary signals that another financial institution could already be facing difficulties.
Numerous analysts are predicting a short-lived upward correction in Bitcoin’s price ahead of the meeting, followed by a sharp decline in the aftermath of the interest rate announcement. This decline is expected to result from the US dollar’s increased strength. With Bitcoin investors and traders on high alert, the upcoming FOMC meeting will surely be a nail-biting event.
Expert Outlines BTC Price’s Next Move
The extended bearish candle on Bitcoin’s price chart indicates that sellers are vigorously defending the $30,000 resistance level. Though the price dropped dramatically, a small positive aspect is that buyers are tenaciously safeguarding the $28K support level. This implies that the Bitcoin price might oscillate between $27.5K and $30K for some time.
Typically, a period of narrow-range trading is followed by a range expansion. If the price continues to decline and falls below $28K, the price could drop to the critical support at $26.5K.
Conversely, if the range expands above $30,000, the BTC price will likely climb to $31,000 and then to $32,200. A breakthrough above this level would signal an increase in momentum.
As of writing, Bitcoin price trades at $28.2K, declining over 5% in the last 24 hours. A prominent crypto analyst, Michael Van De Poppe, predicted that Bitcoin might go into a correction during the FOMC meeting. According to him, Bitcoin might take support at $27.8K and then jump above its 38.6% Fib level at $29K after the FOMC meeting.
Although the market for cryptocurrencies started to rise at the beginning of 2023, the overall prognosis is still uncertain because of the ongoing economic downturn. Nevertheless, it is now safe to say that the cryptocurrency market had a declining trend in 2022.
For instance, the recent collapse of FTX, a Bahamian cryptocurrency exchange established by Sam Bankman-Fried, has created a significant deal of uncertainty in the cryptocurrency industry.
U.S. lawmakers are spinning two different stories about the aftermath of the FTX collapse. However, the Senate Banking Committee is all set to hold a hearing on February 14 to discuss safeguards for the financial system against the risks associated with digital assets. The hearing is called “Crypto Crash: Why Financial System Safeguards are Needed for Digital Assets.”
U.S. Sen. Tim Scott (R-S.C.), the chair of the Senate Banking Committee and the top Republican on the committee said in a statement on Thursday that he wanted to begin work on a bipartisan regulatory framework for cryptocurrencies on that day.
Sen. Scott said, “Recent years have seen expansive growth in the digital assets industry, including an increasing number of consumers interacting with cryptocurrencies. Several high-profile failures resulted in lost consumer assets, exposed regulatory gaps, and highlighted concerns with illicit finance.”
A Difference of Opinion
Congress had a meeting to discuss what Washington should do in the wake of the shocking collapse of the cryptocurrency exchange FTX. Senators urged for immediate legislative action to protect consumers, but there are still numerous differences of opinion over the specifics of such efforts. The debate over how precisely cryptocurrency should be regulated in the United States is expected to last for months.
The FOMC announcement on Wednesday brought bad news to the cryptocurrency industry, and the price of Bitcoin eventually fell below $24,000. However, on the flip side, the Fed’s shift to a dovish policy after remaining hawkish throughout 2022 has been a signal for the cryptocurrency market to rally, and the market has capitalized on this by increasing liquidations.
The FOMC meeting is quickly approaching; therefore, analysts have begun making their forecasts for Bitcoin’s price movement when the meeting concludes. Is it going to have a bounce back, or will it crash?
Expert Pitches In
Famous crypto analyst and YouTuber George Tung predicts a Bitcoin rise based on the king coin’s stability over the previous four weeks and the expectation that interest rates would be set at 25 basis points.
He said that well-known cryptocurrency skeptic Jim Cramer has declared a bull market, which makes him (Tung) a little nervous since it is common knowledge in the cryptocurrency industry that whatever Cramer predicts will not come to pass. If he claims the market is bullish, it should raise some red flags.
Bitcoin, in Tung’s opinion, will have a very positive month in February. Over the previous several years, February has consistently been a positive month for the market.
“The market has a lot of similarities to 2019. If we’re at the breaking point like in 2019, that means there will be a tremendous increase soon.”
Tung claims that we are following the trend of the 2019 rebound that saw Bitcoin’s price rise from under $4,000 to over $12,000. By that measure, Bitcoin’s price should reach $35,000 within the next six weeks.
Since the beginning of the year, the price of Bitcoin (BTC) has continued to rise despite several warnings to the contrary across various time periods. In the last 24 hours, the value of a king coin has increased by 1.2% to $23,100.
Both $23,200 and the 100 hourly simple moving average are near-term resistance to price advancement. The following significant barrier to buyer power is located close to the $23,300 zone. It’s not far from the 50% Fibonacci retracement level of the decline from the high of $23,951 to the low of $22,519. But all signals continue to be bullish, so hopefully, there will no low.
As the Federal Open Market Committee (FOMC) meeting is slowly approaching this week, the crypto market wonders about the after-effect of the meeting on the BTC price. With so much uncertainty and speculation around the corner, it’s no wonder that investors, traders, and enthusiasts alike are eager to know what the future holds, and a question arises on whether this meeting will become the catalyst in sending bitcoin to new heights or it will bring a steep and painful downfall.
Will Bitcoin Soar Or Tumble Due To FOMC Meeting?
All the eyes of the crypto market are currently on the decision in the FOMC meeting as the anticipation creates intense volatility in the BTC price chart. As the US economy experiences high inflation, a higher interest rate may create turmoil in the stock market, plunging Bitcoin’s price with solid downward retracement for being heavily correlated.
According to the on-chain analyst firm, CryptoQuant, the Bitcoin price has made a spike in volatility in the last few days with the hype of the FOMC meeting, and it has touched the highest level in three months.
In addition, the firm noted that the open interest, i.e., the amount of BTC futures contracts opened on crypto exchanges, has reached a three-month high of 8.3%. It is to be noted that the massive accumulation usually drives the surge in Bitcoin’s OI due to the hype of the FOMC meeting, which pushes the BTC price upward for a short period. However, traders should stay aware as the FOMC meeting may bring a short-squeeze and negative spike in the Bitcoin price after an astronomical surge.
Here Is Where BTC Price Heading Next
The Bitcoin market has witnessed a higher high and higher low in the last two days as the $24K resistance level seems too much to handle. Additionally, the spike in BTC mining difficulty creates selling pressure which may cause severe volatility to the downside.
As of writing, Bitcoin price trades at $23.2K, with a decline of over 1% in the last 24 hours. A well-known crypto trader, SkyrexTrading, predicts that Bitcoin is poised for a short-term bearish trend as the asset recently broke below the immediate support level of $23,564. The analyst predicted that Bitcoin might slump hard below its 31.8% Fib level at $22.5K before sparking fresh surges during the FOMC meeting.
However, a piece of positive news from the FOMC meeting will leave a bullish impact on Bitcoin’s price, sending the coin to new monthly highs in February.
Bitcoin price has been hovering above the $20,400 resistance ever since it broke above the levels during the past weekend. However, the prices have been deflated in the past couple of days not only because the bears have tightened their grip but also because the bulls appear to have withdrawn to some extent. As a result, the BTC price is very close to dropping below $20,000 again.
Meanwhile, the FOMC’s fear appears to have spread significantly, as crypto assets have been quite volatile since the early trading hours. Since the market crashed in May 2022, a new trend of the market plummeting with the release of new rates has emerged.
A well-known analyst and trader analyzed the BTC price variations in the recent past and believes the markets may react in a similar way and plunge significantly at 2 PM EST.
The BTC price dropped sharply shortly after the new rates were announced at 2 PM EST, but quickly recovered following FED Chair Jereme Powell’s speech at 2:30 PM EST. In contrast to the previous trend, the BTC price dropped further after a minor rebound fueled by his speech. As a result, the crypto space is divided into likely price movements following the FOMC meeting.
Massive Bitcoin Volatility Fast Approaching
As a result, a significant move is expected in the next 12 hours as the FOMC may be the catalyst that the crypto markets require to increase their volatility. However, 3 possibilities may emerge, either the FED may raise interest rates by 50 bps or 100 bps. While a rise of 75 bps may also be considered which is more likely which is the last phase of the distribution at $21,000.
The analyst, il Capo of Crypto, believes that 75 bps may be a fair raise for today that may slightly propel the BTC price beyond $21,000. However, a rise of 50 basis points may raise the price to $23,000, which is more unlikely. Therefore, the analyst cautions the crypto enthusiast not to use any leverage today, as the Bitcoin (BTC) price and the entire market are expected to remain highly volatile.
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FOMC Meeting on Horizon, Will Bitcoin Form New Lows in September as Bearish Death Cross Haunts the Rally
Bitcoin price appears to be poised to hold above the crucial support zone between $18,800 & $18,200. As Coinpedia reported earlier, the BTC price continues to trade along the neckline of the lower support, intending to rebound finely in the coming days. However, the latest trade-set up flashes huge bearish signals as the price is expected to slice through these levels and register new lows very soon.
The 200-week MA is considered one of the important levels and the BTC price has been constantly failing to regain above these levels. Moreover, the unusual death cross is expected to occur in the next couple of days which could slash the price harder.
As seen in the chart, the BTC price has not tested the 200-WMA more frequently in the recent past. The test happened only a few times in history while the price was busy marking the bottoms of the bearish cycle. On the previous occasions when the price contacted the 200-WMA levels, it bounced off firmly and surged with magnificent numbers.
However, it is slightly diverse now as the asset has markers nearly 10-weekly candles below the crucial 200-WMA levels. Therefore, the probability of a rebound diminishes as the asset is preparing for a massive downswing.
The Bitcoin price is witnessing the first ever Death cross led by a cross of 20-WMA & 200-WMA levels. The 20-WMA levels have crossed the 200-WMA and heading towards the south. While the drop is not yet confirmed, a bearish close for the current week may validate the formation.
Since its inception, the 20-WMA levels traded close to the 200-WMA but never cross the levels. However, if the Bitcoin(BTC) price registers a rebound then the bearish formation may be invalidated. On the darker side, a huge plunge may be expected if the formation is validated which may drag the price below $15000 or even test the levels below $10,000 too.
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The US Fed meeting will play a vital role for the entire US stock and the crypto market. The Federal Open Market Committee (FOMC) meeting on the rate hike will decide the future price actions of leading crypto coins. The upcoming rate hike puts Ethereum, Bitcoin and XRP under pressure, which could change if the much-awaited 0.75% bps rate is approved.
XRP price has seen a rise of over 8% in the last 24 hours, and it is leading the recovery phase among the top projects in the crypto market despite the decline of US stocks ahead of the FOMC meeting, which is scheduled for tomorrow.
According to CoinMarketCap, XRP has made a considerable spike of over 10% from yesterday and is currently trading at $0.4. It seems that the huge spike came after Ripple submitted a filing to the SEC, mentioning that XRP was not a security to the regulators.
Ripple clarified that their native token XRP could not be concluded as a security as Ripple did not provide investors with the rights to act in interest, which is the main requirement to become an ‘Investment Contract.’
Ethereum, Bitcoin, and ADA also increased by 4%, while popular meme coins like Doge and SHIB saw a minimum increase of 2%. According to CoinMarketCap, Ethereum is currently trading near $1,338. However, Ethereum Classic (ETC) slipped downward by 15% as the hype of ETC faded away.
Will The Recover Rally Continue?
The crypto market has just got out of the winter and kicked off its recovery phase. However, no one knows how long the recovery session will continue as the decisions that will be made in the FOMC meeting tomorrow will have a significant impact on the crypto market. The crypto market will remain positive if the rate hike is 75 basis points, which is favored by the industry.
However, some analysts think that the Fed will increase the interest rate to 100 basis point, creating a bearish momentum for the whole industry and the crypto market.
Chris Esparza, CEO and founder of Vault Finance, said, “With August inflation figures of 8.3%, the Fed will be even more determined to raise interest rates by up to 100 basis points. Bitcoin has the highest correlation with the broader stock market, which has been under seller pressure since the inflation data was released.”
Suppose the FOMC meeting does not bring any unexpected moment in the market or investors. In that case, it is expected that the recovery rally will continue further and have a positive impact on the market.
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After a week-long bear action, it appears that the bulls are trying to enter the market as the overall crypto market is flashing green. However, the global crypto market cap is still under $1 trillion and the world’s first cryptocurrency, Bitcoin is yet to regain its pace above the $20,000 level.
Amidst this unfavorable environment, the US Consumer Price Index (CPI) has suggested that the Federal Reserve’s decision to increase the interest rates will not be sufficient to control inflation. Hence, the central bank is expected to step in with a more hawkish approach.
On the other hand, JP Morgan, the financial service provider, predicts a bullish momentum for crypto. At the time of writing, Bitcoin is selling at $19,357 with a surge of 4.54% over the last 24hrs. However, in the last seven days, BTC has lost more than 13%, while ETH has given up nearly 20% in the last 7 days.
Crypto Market To Drop After FOMC Meeting?
Meanwhile, as per JP Morgan crypto market and the stock markets are about to see the bottom in the coming days while the firm’s global head Marko Kolanovic claims a bullish run for the market. Further, he says that the Fed will continue its decision to increase interest rates by 75 bps during the FOMC meeting scheduled for tomorrow.
Another popular analyst at CNBC, Jim Cramer is of the opinion that the present inflation rate is having a negative impact on equities and corporate earnings. But he also says that as the majority of investors are holding on to low positions, any positive news will push the market.
During tomorrow’s FOMC meeting, the US Federal Reserve is expected to hold on to its hawkish stance and increase its interest rate by 0.75%. On the other hand, analyst Michael van de Poppe expects the interest rate hikes to be around 100 bps.