Bitcoin price sold-off from $470 (Bitstamp) and 3100 CNY earlier today. A Fed rates announcement is widely expected to catalyze global market trends later on Wednesday, yet the bitcoin market just took profit, for good measure, before the Fed even spoke.
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Time of analysis: 09h00 UTC BTCC 1-Week and 1-Hour Charts
From the analysis pages of xbt.social, earlier today:
A Federal Open Market Committee (FOMC) at 19h00 UTC today will make a rates announcement, and the market generally expects the Fed to refrain from hiking today and to do so in July instead.
Today’s analysis outlook had remained unchanged since yesterday. Price action was animated below resistance and a continuing rally seemed more and more likely. The last time (October 2015) that the current combination of conditions coincided, bitcoin price had embarked on the strongest rally for 2015 when the Fed asserted its intention to hike rates in December.
The implication of a Fed Funds rate hike is that it will cause money flow into the US economy and, therefore, strengthen the US dollar. By not hiking today the Fed will reveal caution and a wait-and-see approach to the “global economic recovery”, as they refer to it. When the Fed did raise rates, in December, their action sent markets into a tailspin and bitcoin price into a deep correction.
Actually raising rates is, therefore, good for the US dollar, but bad for markets, including bitcoin. Delaying a rates hike, increases uncertainty and stokes the kind of market fear that sends commodities like bitcoin and gold rallying.The implication for bitcoin price was that an announcement, today, of keeping US […]
