As Wall Street adjusts its seat belt for the upcoming Federal Open Market Committee (FOMC) meeting, cryptocurrency investors are also paying attention.
Bitcoin price started the week above the $27,000 zone aiming for an increase. BTC is currently attempting consolidation near the $27,100 level down 0.5% on the day.
Most major altcoins are up today. ETH is moving towards the $1,650 support zone. XRP is stable near $0.51 and is showing signs that it could rise to $0.56. ADA is trading near $0.2550.
Traditional stocks stumbled yesterday, with the S&P 500 and Dow Jones Industrial Average falling about 0.2%, and the Nasdaq Composite going even deeper with a decline of more than 0.4%. With almost everyone betting that the Federal Reserve (Fed) will keep interest rates stable, the suspense now revolves around statements from Fed Chairman Jerome Powell. The Fed Meeting takes place this week on Wednesday 20th September.
In this context of uncertainty, it is worth asking: how does this affect the cryptocurrency scenario? While many may think that the Fed’s decisions should not impact a market as decentralized as crypto, the reality is different. Cryptocurrency investors often use these assets as a kind of “safe haven” against inflation and economic uncertainty. Therefore, any movements in the regulatory environment or interest rates could also make waves in the cryptocurrency market.
The current financial market scenario is like an economic chess game. Investors are playing it safe, and the Fed has the latest move. Goldman Sachs, for example, predicted that the Fed will keep the interest rate unchanged at 5.25-5.5%. The unknown that remains is whether there will be an adjustment later this year, to something between 5.5-5.75%.
So what does this mean for cryptocurrencies? If the Fed decides to raise interest rates, it is possible that some investors will migrate to safer assets like the dollar, decreasing demand for cryptocurrencies. On the other hand, a decision to keep everything as is could be seen as a positive sign, strengthening crypto’s position in the short term.
The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.