Happy FOMC Day
What to Expect from the Fed and Bitcoin
Happy FOMC Day
Today is FOMC Day, a key event for investors as we anticipate whether the Fed will start cutting interest rates.
The market is split between expecting a 25 or 50 basis point cut, which is unusual this close to the decision. A 25 basis point cut would align with recent softening in economic data and elevated interest rates, but there's significant speculation that the Fed might be more aggressive and opt for a 50 basis point cut. A larger cut could provide a short-term boost to risk assets like Bitcoin.
Bitcoin is currently in an interesting spot. Prices have risen to around $61,000, but we've seen some pullbacks to the $57,000 range—nothing out of the ordinary. The 10-day moving average is trending upward, signaling that things are stable for now.
However, if the Fed opts for a modest 25 basis point cut, there could be a dip in Bitcoin's price. A more aggressive 50 basis point cut, on the other hand, might push Bitcoin higher, possibly towards the $63,500-$64,000 range. For those holding Bitcoin long-term, it’s important to remember the bigger picture: we’re halfway in this cycle, and while there could be short-term volatility, the four-year cycle remains intact, with potential highs likely in 2025.
In the short term, keep an eye on key support levels around $55,000-$57,000. A sustained drop below these could signal short term trouble, while a move higher could open the door for Bitcoin to test the $64,000 range. But whatever the Fed decides today, the 4-year outlook for Bitcoin remains positive.
Thank you for reading. If you're enjoying these insights, hit the button below to unlock all my exclusive content.
Written by Timothy Assi, a popular investor on eToro.
Connect with me on:
🟦 Linkedin: Timothy Assi
🟪 Instagram: @panic_drop
⬛ X: @timoassi
A 25 bp cut would've been more natural, in my opinion. Is the Fed seeing something we're not seeing? The 50 bp cut could mean the economy isn't going where it should be going.