If a FOMC Rates Reduction Won’t Shift BTC Price, What Will?

Everyone hoped for a crypto price breakout. For seasoned BTC investors reaping profits, the FOMC event may not have held significant weight. Yet, those savvy degens who bought at peak prices looked to Jerome Powell and the Federal Reserve as their only hope. Expectations were high for Bitcoin to rally, but then disappointment struck, and the leading crypto asset plummeted by -5%, dropping below $110,000.

Currently, the BTC price and the broader cryptocurrency market have yet to bounce back from yesterday’s silence. With dreams dashed, the Bitcoin USDT price has decreased from the beginning of the week, and recovery hinges on maintaining the $110,000 support by day’s end.

Until then, traders ought to observe the price movements closely. As of October 30, Bitcoin’s dominance remains above +59%. It could rise if cryptocurrency prices do not meet the inflated expectations of latecomers. In the meantime, the overall cryptocurrency trading market cap has slid nearly -2% to over $3.8T.

(Source: Coingecko)

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Jerome Powell and FOMC Made Expected Rate Cuts

There was nearly a +100% chance of a rate cut yesterday. Everyone anticipated the FOMC and the central bank would reduce rates for the second time this year, and Powell and his committee did not disappoint.

In spite of the government shutdown, the central bank reduced rates to the anticipated +3.75% to +4% range, another notch lower, enabling more cash to circulate.

Overall, the FOMC, which oversees monetary policy and inflation control while monitoring employment conditions, aimed to bolster jobs, which have unfortunately struggled in recent months.

Their choice to cut rates occurs at a time when inflation remains “somewhat elevated,” surpassing the ideal +2% benchmark.

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What Occurred? Why Did Bitcoin’s Value Decline?

Here comes the twist, though.

Even though the rate cut matched market sentiment, BTC USDT prices initially rallied, but that was before the press conference with Powell.

That’s when things fell apart.

During the post-meeting press briefing, Jerome stated that the FOMC remains dependent on data, as always, yet further rate reductions in December are not a “foregone conclusion.”

The decision followed a division among FOMC members, with two dissenting opinions in different directions. The Fed chair emphasized that the central bank would keep a close watch on shifts in the labor crypto market “very, very carefully.” However, even if circumstances improve, they will hesitate to cut rates again if inflation gains momentum.

This news was hawkish and detrimental to risk assets, primarily cryptocurrencies, including all 100X coins.

It surprised analysts and traders alike, as prior to this meeting, the chance of a rate cut in December was over +90%. That figure has since dropped below +75% and is expected to decline further.

(Source: CME)

Now the pressing question is: What will influence the BTC price?

The future performance of the crypto space and some of the leading Solana meme coins in the coming days will rely on fundamental factors.

Indeed, while interest rates are low and more liquidity may enter the market, the stability of the multiple arrangements between China and the United States will be significant.

Furthermore, institutional investments through spot ETFs will dictate the rate at which the BTC price surpasses essential price ceiling points, currently at $115,000 and $120,000.

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The post If a FOMC Rates Cut Won’t Shift Bitcoin Price, What Will? appeared first on 99Bitcoins.