Today’s trading session is likely to be volatile for Bitcoin. The crypto market anticipated the U.S. Federal Reserve (Fed) Federal Open Market Committee (FOMC) meeting, which might have no impact or drive down risk-on assets.
The Fed is anticipated to announce an increase in interest rates at this meeting. However, trading desk QCP Capital claims that the market has discounted the prospect of a rise of 100 basis points (bps).
If the Fed achieves expectations, market investors anticipate 75 basis points. As a result, the upward momentum for bitcoin and other digital assets will likely continue. Stated QCP Capital:
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Every FOMC meeting this year has seen a positive immediate market reaction to the rate decision. So we expect the same for this one.
The trading company also asserts that if the Fed adopts a “one-off 75 bps” boost, there may be more upside. However, on the strength of a slowdown in inflation indicators in the future, the financial institution may revert to 50 bps.
This view is supported by the fact that U.S. public corporations have reported earnings that were below estimates without big shocks so far. Apple and other significant I.T. businesses are anticipated to release their earnings results on July 28.
If there are no significant shocks, the FOMC meeting and relaxation in traditional financial markets should help the cryptocurrency market. Regarding the latter, QCP Capital stated:
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With the risk of an overly hawkish fed out of the way and 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 surge could not last long since miners still exert significant selling pressure on Bitcoin and the cryptocurrency market. In that regard, QCP Capital anticipates short- to mid-term sideways movement.
What Could Trigger More Downside Pressure?
The trading company thinks there may be a wild card that might have an adverse effect on world markets. Speaker of the House Nancy Pelosi, a congresswoman for the United States, is reportedly considering a trip to Taiwan.
Tensions between the United States and China may rise if the visit ever happens. Stated QCP Capital:
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August tends to be quieter with the U.S. and Europe on summer vacation. However, 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.
At the time of writing, Bitcoin (BTC) is trading at a gain of 3% over the previous 24 hours, or $21,527.90.
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