The crypto market is waiting for a new rate hike decision by the US Federal Reserve. This time is very exciting because of the banking crisis that could cause an “economic disaster”.
Bitcoin and Ethereum prices are eagerly awaiting the outcome, but it looks likely that the Federal Reserve will raise interest rates by another 25 basis points after the monetary policy meeting on Wednesday.
Estimates about the potential interest rate hike
Market sentiment in the coming weeks is highly dependent on the direction indicated by Federal Reserve Chairman Jerome Powell. Today, the Dow Jones, S&P 500, and Nasdaq futures are heading green. However, first-quarter GDP and earnings growth were lower than expected. The collapse of First Republic Bank has also raised fears of a banking crisis, but JPMorgan expects that crisis to be coming to an end.
As a result of the current problems, Robert Kaplan, former President of the Federal Reserve Bank of Dallas, suggests that the Fed should consider pausing. The banking crisis is believed to have only just begun as US regional bank stocks fell sharply on Tuesday.
The economy is slowly decelerating, says Tai Hui, a leading market strategist at JPMorgan, as job vacancies data published on Tuesday show. Hui believes the Fed should raise interest rates by another 25 basis points and then pause. It refers to a rate hike by the Reserve Bank of Australia yesterday, after a pause last month. In addition, he expects interest rates to be cut this year and that the Fed will try to bring inflation to its target rate by 2024.
Bitcoin traders are waiting with bated breath
Over the past 24 hours, bitcoin price has been fairly stable and it is currently trading around $28,450. However, the trading volume has increased by 5% over the same period, which indicates a growing interest among traders.
The US Dollar Index (DXY) hit a low of 101.51 today. DXY shows volatility and is likely to rise after the Fed rate hike. This increase will also put some pressure on the Bitcoin price. However, Powell’s optimistic sentiment will prevail and suggest a pause in the coming months.
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