Why Bitcoin Could Trade Above $22,000 After Today’s FOMC Meeting
28 July 2022 - 12:36AM
NEWSBTC
Bitcoin is poised to experience volatility during today’s trading
session. The crypto market is gearing up for the U.S. Federal
Reserve (Fed) Federal Open Market Committee (FOMC) meeting which
could result in a no-event or push risk-on assets down. Related
Reading | Shiba Inu Whales Trading Volume Surges 640% As SHIB
Holds Critical Support During this meeting, the Fed is expected to
announce a hike in interest rates. According to trading desk QCP
Capital, the market has ruled out the possibility of a 100 basis
points (bps) increase. Market participants expect a 75 bps, if the
Fed meets expectations Bitcoin and other digital assets seem likely
to resume their bullish momentum. QCP Capital said: Every FOMC
meeting this year has seen a positive immediate market reaction to
the rate decision. We expect the same for this one. In addition,
the trading firm claims that there is a possibility of more upside
based on the Fed adopting a “one-off 75 bps” hike. In the future,
the financial institution could return to 50 bps on the back of a
slow down in inflation metrics. Contributing to this theory, U.S.
public companies earning season has reported under expectations
without major surprises so far. Tomorrow, July 28th, Apple and
other big tech companies are expected to publish their earnings
reports. If there are no major surprises, the crypto market should
benefit from both the FOMC meeting and a relief in legacy financial
markets. On the latter, QCP Capital noted: With the risk of an
overly hawkish fed out of the way and with inflation slowing down,
we think that markets will remain supported with the previous lows
providing a base (BTC at 17,600 and ETH at 880). The post-FOMC
rally could be short-lived as Bitcoin and the crypto market
continue to see high selling pressure from miners. In that sense,
QCP Capital predicts sideways movement for the short to mid-term.
What Could Trigger More Downside Pressure? The trading firm
believes there is a wild card with the potential to negatively
impact global markets. U.S. Representative for Congress and Speaker
of the House Nancy Pelosi is apparently planning a visit to Taiwan.
If the visit ever materializes, there could be an escalation in
tensions between the U.S. and China. QCP Capital said: August tends
to be quieter with the US and Europe on summer vacation. If
tensions boil over, we might see a risk-off move in thin liquidity.
From a volatility perspective, every FOMC this year has been a
disappointment. Related Reading | TA: Bitcoin Price
Consolidates, Why Recovery Could Be Capped At the time of writing,
Bitcoin (BTC) trades at $21,400 with a 3% profit in the last 24
hours.
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