The Fed must decide today what to do with interest rates. His decision may determine the direction in which the bitcoin price will go in a few hours. Currently, we can see on the trading floor waiting for the meeting of the Federal Reserve authorities.
The Fed has a dilemma?
There’s a reason I put a question mark above. However, this is a rhetorical question. The US central bank is unlikely to have a dilemma today: it will cut interest rates for the second time.
Where did this conclusion come from? The latest data from the labor market were not particularly good, and in September there was an inverted bond yield curve. The latter is a harbinger of recession from which the Fed must protect the US economy. Therefore, it has no choice: it must continue its policy of cutting interest rates to increase liquidity in the markets.
Now take a look at the current data from Fed Watch Tool, a platform that allows us to predict what the Fed will do. 12 hours before the officials made the decision, the data below shows that the scenario of a 25 bp cut is valued at 97.5%, and a 50 bp cut at the remaining 2.5%. The option of leaving rates in the current range is not an option at all.
Will the bitcoin price rise again?
Today, one bitcoin costs USD 74,606, which is the same as yesterday, but also 3.2% more than 7 days ago.
The hero of the last hours is ether, 1 ETH already costs USD 2,830, which is as much as 9% more than 24 hours earlier and 7% more than a week ago. There are many indications that the market is beginning to consider bitcoin as “expensive” and ether as an interesting alternative and investment opportunity.
The above does not mean that BTC will no longer increase in price. I think we still have a few months of growth ahead of us, which will be driven by the Fed’s policy and maybe even the actions of Donald Trump, who promised a lot to the blockchain community as a presidential candidate. He will officially take office in January and then we will see whether his promises will turn into deeds.
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