Crypto

Prices in the cryptocurrency market are rising this week after the release of Fed rates?

Fed Chairman Jerome Powell. Source: YouTube/Federal Reserve.

The price of the most important cryptocurrencies could rise sharply this week if the US Federal Reserve gives any signal that could indicate a slowdown in the pace of rate hikes this year.

Investors are anticipating a potential rise in the markets in the coming days as a result of the Federal Reserve’s announcement of key rate changes on Wednesday.

This expectation is shared by both institutional players such as investment banks and members of the crypto community. However, opinions still differ on what form this rally will take and on the specific conditions required for its holding.

Analysts expect the Fed to raise rates by 75 basis points this week, but economists aren’t sure what will happen at the next Fed meeting in December. The expectation of a 75 basis point hike at this week’s meeting is also shared by the market, with the CME’s FedWatch tool currently indicating an 86% chance that the Fed will raise rates by 75 basis points.

Note that the tool also points to a 14 percent chance of raising key rates by just 50 basis points, which would still cause a rally in the entire crypto market.

Source: GCE

According to a statement by investment bank Merrill Lynch, there have already been discussions at the Fed about a possible slowdown in rate hikes from December. The bank does expect Fed Chairman Jerome Powell to reveal the content of these discussions shortly, which will open the door for a 50-point gain in December.

Similarly, Goldman Sachs, another high-profile Wall Street bank, said in a newsletter that it estimates there will be a 75 basis point increase this week, likely to be followed by a 50 basis point increase in December.

“We expect the FOMC to tie this slowdown even further to 50 basis points in December, and interest rates to rise towards the end of the year. We add another 25 bps increase to our own forecast, which now points to a 75 bps increase in November, 50 bps in December, 25 bps in February and 25 bps in March. »

Will Powell’s comments spark a rally in the crypto market?

The question now is whether Powell’s comments about a possible slowdown in rate hikes starting in December will be enough to get the cryptocurrency market back on track after months of downtrend.

On Twitter, a large number of users are hoping that this scenario will happen, and some are not shy about saying that the price of bitcoin will skyrocket once the Fed makes its announcement this Wednesday.

Others, such as Alex Krueger, a crypto trader and popular economist on Twitter, say they think that not only the price of bitcoin, but also the price of Ethereum, will skyrocket on Fed announcements this week.

However, it is impossible to predict exactly how this week will develop in the markets. But with the surprises of the past few weeks, especially with Bitcoin rising from $19,000 to $21,000, the words of enthusiastic and optimistic investors are becoming more and more credible.

Is the rise in the price of bitcoin an early signal of a future Fed reversal? Wednesday’s announcement will answer that question.

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