Bitcoin Price Declines as The Fed Cancels Rate Cut Expectations
The US interest rate was declared unchanged at 5.50% during the early morning FOMC meeting today (2/1/24) at 02:00 AM WIB. The price of Bitcoin (BTC) has experienced a -3.26% decrease since early morning, possibly in response to The Fed's statement, which may no longer consider cutting the US interest rates in March 2024.
Bitcoin and Altcoins Experience Decline
Since 02:00 AM WIB (2/1/24) after The Fed announced that the US interest rate would remain at 5.50%, the crypto market has shown a decline. The crypto market lost a valuation of US$50 billion. Bitcoin, as the crypto asset with the largest market capitalization, has declined by -3.26% from US$43,544 to US$42,123.
BTC seems to be maintaining support around US$42,000 on the one-hour timeframe chart. Breaking this support level could lead to further decline to US$39,000.
Altcoins also appear to be experiencing a decline. Among the top 100 altcoins based on market capitalization on Coinmarketcap, five altcoins with the highest declines include: FTX Token (FTT, -28.12%), Manta Network (MANTA, -11.72%), Sei (SEI, -11.61%), Pyth Network (PYTH, -9.64%), and Celestia (TIA, -8.32%).
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The Fed May Not Cut Interest Rates
Before the March FOMC meeting, there were rumors of plans to lower interest rates. However, The Fed stated that they might not do so because they want to ensure that the inflation rate remains around 2% before taking such a step.
"The Committee does not expect to lower interest rates until it has greater confidence that inflation is moving sustainably towards the 2 percent target," said the Federal Reserve Board at today's FOMC meeting.
Based on CME Watchtool data, the likelihood of the US interest rate in March 2024 remaining at 5.50% is higher at 64.5%. Meanwhile, the other possibility, a 25 basis points interest rate cut, has a 35.5% chance.
This uncertainty has made risk markets such as crypto hesitant, as the possibility of a rate cut in the next FOMC meeting becomes uncertain. This has led investors and individuals to seemingly withdraw their funds early in a short period.
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*Disclaimer:
This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.
