All eyes are on the FED today! How Will Bitcoin and Altcoins Be Affected?

Crypto the money market is bracing for a potentially volatile week, with the Federal Open Market Committee (FOMC) meeting casting a long shadow. The leading cryptocurrency Bitcoin has seen a significant fall in price and is currently trading around $60,189, marking a decline of over 5% in the last 24 hours. This pullback reflects broader market concerns surrounding the Fed's upcoming interest rate decision.

FOMC meeting and interest rate dilemma

Today, around 21:00 CET, the FED is expected to announce its interest rate decision. Expectations for a Interest cut have changed drastically since the beginning of the year. Initial fantasies of multiple outages gave way to the possibility of only one outage by December. Wall Street banks are also divided, with estimates of the first cut ranging from July to December. Further complicating the scenario, some Fed policymakers have hinted at a potential rate hike, leaving investors insecure about the Fed's next move.

• Steady rates: In this scenario, Altrichter predicts a moderate rise in stocks as investors find comfort in the absence of rate hikes. He expects the S&P 500 to rise slightly, Treasury yields to fall moderately, and the dollar to hold steady. Commodities such as oil and Bitcoin may see a small increase.
• Dovish turn: Altrichter predicts more pronounced rise in the S&P 500 and more fall in Treasury yields if the Fed adopts a more dovish (accommodating) stance.

The Crypto market, especially altcoins, is particularly vulnerable to pre-FOMC volatility. The prospect of higher interest rates and the potential for a safe flight towards the dollar contributed to the crisis. Bitcoin remains under significant selling pressure despite a brief rebound above $60,000. The fall of about 6% in the price of Bitcoin has created fear, uncertainty and doubt (FUD) among investors. However, some analysts see this as a potential acquisition opportunity.

Crypto currency expert Ali Martinez highlights a historical trend in which a touch of the 100-day EMA and a lower RSI reading precedes a significant price recovery after a similar decline. However, Martinez warns against a sustained close below the 100-day EMA, which could signal that the 200-day EMA could fall further towards $52,000. On-chain analytics firm Santiment observed an increase in "buy the dip" calls, which coincided with the price drop. This suggests that a potential conflict has arisen among traders; Some see it as an opportunity to acquisition, while others are wary.

Adding to the plummet trend is the Bitcoin's worst monthly performance since November 2022; In April, there was a fall of about 16%. This fall comes after a period of high anticipation around the launch of U.S. Bitcoin ETF, which initially pushed the price to around $74,000 in March. Even the much-awaited launch of Bitcoin and Ether ETF in Hong Kong failed to create the expected momentum; trade volume lagged significantly behind U.S. ETF launches earlier this year.

This week promises to be a very important week for the cryptocurrency market. The FOMC meeting will be the focus, with potential consequences for Bitcoin and the broader crypto environment. Analysts are divided; Some predict a potential relief rally, while others warn that there could be more fall. Only time will tell how the market will react to the Fed's decision, but one thing is certain: volatility is likely to remain high.

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