Stocks are rising, the US dollar is fluctuating. Gold is moving slightly lower as Bitcoin maintains its position above $20,000. Meanwhile, all eyes are on Wednesday’s Fed rate meeting. The US Federal Reserve (FED) is expected to meet on Wednesday this week and decide on interest rates.
Expectations for the Fed rate decision are in the direction of 75 basis points
The FED’s interest rate decision, which will be announced on Wednesday at 21:00 Turkey time, is followed by many market players. According to information from CME Group, the market currently sees 80 percent probability of the central bank choosing a 75 basis point increase. The Fed’s interest rate decision gained value with the highest inflation level of the last 41 years in the USA. With the back-to-back interest rate hikes, the FED increased the interest rate to 3.25 percent.
Koindeks.com As we have also reported, the FED previously drew attention to the 4.5 percent rate on interest rate hikes. Therefore, although there is a slowdown in the increase, we are likely to see an increase for a while. At least in December, it is expected to increase interest rates. If we see 75 basis points increase this month as a result of Wednesday’s announcements, 50 basis points increase is expected at the December meeting.
How might Bitcoin and cryptocurrencies be affected?
For the past few months, Bitcoin price has been trading close to $20,000, a sign that market volatility has settled. Last week, it reached over $20,000 and managed to hold on here. However, the FED interest rate decision, which we mentioned above, also affects BTC. The price change in BTC, on the other hand, affects other altcoins such as SHIB, ETH. Last week, the cryptocurrency’s 20-day volatility fell below the Nasdaq and S&P 500 indexes for the first time since 2020, according to data from crypto research firm Kaiko.
Stocks and cryptocurrencies have fallen sharply this year as interest rate hikes by the US Fed and a stronger dollar weighed on the division. Bitcoin’s interest in equities has grown over time as more institutional investors are investing in crypto. However, the price of Bitcoin has stabilized recently. And for some investors, decreasing volatility is a favorable sign. For example, Vijay Ayyar, the international leader of crypto exchange Luno, says that BTC has been in the middle of 18-25 thousand dollars for 4 months, creating a potential base.
For many, the current “crypto winter” is largely the result of the Fed’s aggressive tightening, which has increased interest rates. Therefore, a development that the FED will end the rate hike may positively affect BTC. But it should be noted that this is just a possibility.
What are the prospects for gold?
Gold price (XAU/USD) is holding a low low at $1,640 on Monday. It records a three-day series of losses as it prepares for the seventh monthly drop. Meanwhile, he is acting with a pre-FED bill. In Bitcoin-like form, the hint that the FED will end the rate hike may delight gold bulls. According to gold analyst Anil Panchal, resistance at $ 1,659 is worthwhile. Before that, the 10-DMA level of $1,649 must be surpassed. On the downside, reinforcement levels of $1,630, $1,617 and $1,614 are indicated. In general, the downside in gold price is finite. This highlights the Fed’s monetary policy announcements as the key catalyst.