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Today, all eyes in Bitcoin and altcoins are on the critical FED meeting. While the main scenario expected in the market is that interest rates will remain unchanged, a rate hike is not entirely ruled out. According to CME FedWatchTool, the probability of a 25 basis point increase by the FED in July is priced at 31.5%.
While expectations remain mixed, leading cryptocurrency analysis firm K33 Research suggested that the impact of the Fed’s upcoming interest rate decision on Bitcoin may be less significant and more limited compared to previous cycles.
The Impact of the FED Decision on Bitcoin May Be Limited!
K33 Research head Vetle Lunde stated in the report that the Nasdaq entered July with strong upward momentum and heavy positioning, while Bitcoin continued to trade sideways with volatility near multi-year lows.
According to Lunde, this situation has caused the correlation between Bitcoin and Nasdaq to approach its lowest levels in recent years, suggesting that the price movements of the two assets may increasingly diverge.
Therefore, Lunde stated that this FED decision may not be as decisive for the $BTC price as it has been in the past. According to Lunde, Bitcoin’s low volatility and sideways movement (causing a reduced reaction to macroeconomic developments) and its price behavior diverging from the Nasdaq may limit the impact of FED decisions on $BTC and the crypto market.
Bitcoin’s Rise May Continue After FOMC Meeting!
Besides K33 Research, another analyst believes the FED decision will have a limited impact on $BTC. Popular analyst Michaël van de Poppe predicts that the rise in $BTC will continue after the FOMC meeting.
Poppe argues that Bitcoin has shown a solid recovery and is likely to continue its upward movement after the FOMC meeting. Van de Poppe added that the market has priced in excessive fear ahead of the FOMC meeting, and Bitcoin’s strong resilience supports the view that the rally will continue.
*This is not investment advice.