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- The Fed announcement is going to play a very important role in the future of bitcoin
- A binary response is expected from the Fed Statement, says QCP Capital
- The crypto market appears to be bracing for a spike in volatility following the Fed’s announcement.
Looking at the growing prices of and investments in Crypto, the Fed announcement holds a very important role, in the future of BTC. The main focus on Wednesday’s Federal Reserve financial policy statement, which may provide insights on the central bank’s plan of action and inject volatility into monetary markets, is keeping Bitcoin in a favorable range. Brian Tehako, CIO at Warwick Capital Administration, observed that the market is completely neutral ahead of the Fed with only a little spot shopping for.
Since Monday’s European buying and selling hours, the cryptocurrency has been trading in a narrow range of $39,400 to $41,300, according to statistical data. A binary response is expected from the Fed Statement, that will completely change the face of BTC, as per the QCP Capital of Singapore. We have witnessed the magnanimous amount of selling and buying that has occurred in Bitcoin compared to any other form of market. If the Fed Statement comes in favor of BTC, it could make the rise of BTC inevitable at least till September.
BTC price fell to $30,000 in just eight days
Within a span of just eight days, the price of BTC plummeted to $30,000 from $58,000, until May 19, 2021. The sell-off began when official data released on May 12 revealed that the US client worth index had risen to its highest level in over three years. Looking at the graph, a feeling of fear began to prevail. Liquidity began at a speeding level, and it was highly stimulated by the fear that set in due to the tapering of the Fed graph. With a fall in BTC’s prices with the result of the Fed, the shares, stock, and gold market experienced a boom and gained over 7.8 percent and there was similar demand for the equity.
As a result, bitcoin and other cryptocurrencies have been trading at a discount ahead of the Fed meeting and may benefit the most from a dovish outcome. On the other hand, a hawkish shock could put pressure on asset prices.
The volatility of Crypto to change very soon
The crypto market appears to be bracing for a spike in volatility following the Fed’s announcement. An analyst is of the view that the crypto market appears to be long gamma leading into the event. Synergia Capital’s head of analysis, Denis Vinokourov. According to Patrick Heusser, the head of buying and selling at Zurich-based Crypto Dealer AG, the ache trade may be a risk-averse reaction, resulting in a rise in safe-haven currencies like the franc, yen, and US dollar, as well as a sell-off in commodities and stocks.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
