US Central Bank Expected to Raise Lending Rate by 25bps: Experts Predict Final Hike of 2023

After the most recent increase in the federal funds rate, the U.S. Federal Reserve is set to raise the lending rate by 25 basis points (bps) to 5.25% in three days, according to expectations. A recent poll of 105 economists revealed that 94 of them predict a 25bps rate hike will occur during the May [...]

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Market Outlook: CME Fedwatch Tool Points to Increased Chance of June Rate Hike

According to the CME Group Fedwatch tool on Thursday, there was a 51% probability of a quarter-point rate increase during the upcoming Federal Open Market Committee (FOMC) meeting on June 14. Just a fortnight ago, the Fedwatch tool indicated a slim possibility of the federal funds rate reaching 5.50% next month. The following day on [...]

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Fed Could Hike Interest Rates By 75 BPS, Here’s What It Means For Bitcoin

The FOMC meeting is currently looming above the financial markets, including bitcoin, given that it is just a few days away. Previous interest rate hike trends and the fact that inflation remains a prominent threat have led to a negative outlook for the FOMC meeting. It is expected that another Fed interest rate hike is on the horizon, which will no doubt have a profound effect on the crypto market. FOMC Meeting Draws Near The next FOMC meeting will take place on November 1-2 according to the official schedule. It happens around once every one to two months and is important as this is where the Fed decides what to do in regard to the economy and keeping it healthy. Related Reading: Ethereum Devs Try To Leverage Price Surge As Smart Contracts Reach New High Unlike the previous years, 2022 has been a very hard year, not just for the United States economy, but for economies all around the world. Inflation rates have been reaching levels not seen in decades and the Fed has had to tighten up its policy in response to this. Interest rate hikes have been the norm for the last couple of months, in most cases, coming in higher in most cases than expected. This time around, Wu Blockchain has said that the expected interest rate hike is 75 BPS, with an 81% probability of this happening. If it does play out this way, then this would be the fourth consecutive interest rate hike of 75 bps by the Fed, which could have negative consequences for assets in the crypto space such as Bitcoin. On November 2 next week, the United States will announce the Fed Interest Rate Decision, and the probability of raising interest rates by 75bps is currently 81%. The U.S. unemployment rate for October will be released on November 4. https://t.co/nGgrVQN0to — Wu Blockchain (@WuBlockchain) October 31, 2022 How Will Bitcoin Respond? The past performances of bitcoin in relation to interest rate hikes by the Fed can often be a guide for what to expect in the future. If the current prediction for another 75 bps turns out to be right, then it will be an extremely volatile week for bitcoin and the crypto market. BTC continues to trend upward | Source: BTCUSD on TradingView.com Back in September when the Fed had last increased interest rates, the price of bitcoin had responded quite negatively. In fact, it would prove to be the most volatile reaction to the FOMC meeting given that BTC’s price had dropped more than 5% in one minute. This was going off a three consecutive interest rate hike. Related Reading: Can Elon Musk Influence The Next US Election? Another interest rate hike this week is expected to lead to even larger volatility in the market. This will also coincide with the profit-taking that is currently ongoing due to bitcoin’s recovery above $20,000. It could be the last straw that drags the digital asset back below $20,000 once more. However, the interest rate hikes are not expected to continue indefinitely. It is likely that 2023 is going to see a reversal in this trend, which would present a growth opportunity for risk assets such as biotin.  Featured image from Coinews, chart from TradingView.com Follow Best Owie on Twitter for market insights, updates, and the occasional funny tweet…

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Bitcoin sinks again ahead of this week’s FOMC meeting

Bitcoin (BTC) fell to lows of $18,255 on crypto exchange Coinbase to see the world’s largest digital asset by market cap touch its lowest price levels since the crypto rout recorded in June 2022.

The bellwether crypto was down 7.8% early Monday morning (05:30 am ET) and trading around $18,430 across major exchanges as shown by CoinGecko data.

At current levels, Bitcoin is sitting below the previous cycle high, with negative sentiment likely to aid the bearish push for a lower target. (Bitcoin fell to lows of $17,600 on 18 June 2022 following a massive bear market sell-off catalysed by the collapse of Terra and LUNA and implosions for several crypto companies.

Crypto analyst Michael van de Poppe points to Bitcoin’s local low but thinks a lot more could happen ahead of the FOMC meeting this week.

Local lows for #Bitcoin, while FOMC meeting is approaching.

Overall consensus is that we'll have 100bps hike with continued hikes in coming months, while debates on this policy start to increase.

Sell the rumor, buy the news?

We'll know on Wednesday.

The rest of the crypto market is also red, with Ethereum (ETH) shedding more than 10% in the past 24 hours.

As Invezz reported last week, Ethereum completed its historic transition from proof-of-work consensus to proof-of-stake consensus mechanism – the Merge. However, the bullish effect of the event appears to either already have been priced in pre-Merge or will be felt long term. For now, Ether is struggling with downside pressure just under $1,300.

Again, van de Poppe thinks the Fed rate hike could have an impact on the price of Ether. He said in a tweet on Monday:

“Ethereum is looking at weakness here, as it lost an upwards trending structure. Expecting a response from the region between $1,200-1,300. Not sure whether we’ll get a bounce towards $1,425 as FED on Wednesday is most important as a decider of a trend.”

#Ethereum looking at weakness here, as it lost upwards trending structure.

Expecting a response from the region between $1,200-1,300.

Not sure whether we'll get a bounce towards $1,425 as FED on Wednesday is most important as a decider of a trend. pic.twitter.com/BZ7RaaEdqT

The past 24 hours have also seen double-digit losses for other major altcoins, including Cardano, Polkadot, XRP, and Polygon. Overall, losses across crypto have the global crypto market cap down well over $70 billion, currently down 7.3% to about $943 billion.

Losses for crypto come as the broader risk asset market frets over tighter central bank monetary conditions. This week, the US Federal Reserve is set to unleash another interest rate hike – it could even be a 100 basis point hike. Elsewhere, higher rates are also expected from the Bank of England and other central banks (here is our latest article on the three key rate hikes this week).

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Fed Pauses Interest Rates After 10 Consecutive Hikes; Committee Likely to Raise Rates ‘Somewhat Further’ This Year

In accordance with market predictions, the U.S. Federal Reserve decided to halt its rate hike this month after ten consecutive hikes since last year. The members of the Federal Open Market Committee (FOMC) asserted that the U.S. banking system is still “sound and resilient,” and the committee continues to closely monitor inflation risks. Federal Reserve [...]

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Biden Appoints New Fed Vice Chair as Fedwatch Tool Shows Slim Chance of Rate Hike at June Meeting

Investors believe it is highly likely that the target rate will remain unchanged at the June 14 Federal Open Market Committee (FOMC) meeting, following the U.S. Federal Reserve’s decision to increase the federal funds rate by 25 basis points on May 3. As the battle against inflation in the U.S. rages on, the Biden administration [...]

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US Inflation Cools to 4% Annual Rate, Setting Stage for Fed’s Decision on Interest Rates

The U.S. Bureau of Labor Statistics’ consumer price index (CPI) report, released on Tuesday, reveals that inflation in the United States has eased to a yearly rate of 4%. The latest development arrives just ahead of the upcoming Federal Open Market Committee (FOMC) meeting scheduled for June 14. The prevailing market sentiment leans towards the [...]

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Why is Litecoin (LTC) price up today?

Litecoin price is up today after the SEC acknowledged Canary Capital's spot LTC ETF application within two weeks of its initial filing on Jan. 16.

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