Bitcoin Price: The ongoing banking crisis along with macroeconomic concerns in the United States could likely trigger a favorable outcome for the crypto market in the upcoming Federal Open Market Committee (FOMC) meeting. When the US Fed committee meets on March 21 and 22, 2023, the central bank panel will take into account its larger goal of bringing down the inflation to the 2% target. However, an immediate challenge in the form of bank crisis was caused with the collapse of Silicon Valley Bank last week.
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The consumer price index (CPI) rose 0.4% in February 2023 and 6% from a year ago. But the the KBW Nasdaq Bank Index, a benchmark stock index of the banking sector, took a 27.62% in the last two weeks as fears of contagion spread to other banks’ investors.
Fed Rate Hike – A Pause?
The FOMC meet’s outcome should address the dual issue of containing and bringing down inflation while also preventing a larger banking crisis, one that could be detrimental to other industries in the country. The CME FedWatch Tool, which gauges the Federal target rate at upcoming FOMC meeting, is predicting more likelihood for a 25 bps increase (63%) than a ‘no hike’ scenario. In this context, analysts believe a 25 bps rate hike followed by dovish Fed sentiment could trigger Bitcoin price rally to above the $30,000 milestone. Ted, a Bitcoin enthusiast, said he would not rule out a rally in such a scenario next week.
“If we see 25bps + a dovish Fed next week, I would not be surprised to see Bitcoin trade above 30k.”
However, given the BTC price trend around previous FOMC meetings, the cryptocurrency could see some correction ahead of the meeting.
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