The Bitcoin and crypto market faces the most important event of this week and probably the entire month of June today with the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve (Fed) at 2:00 pm EST (release of the interest rate decision) and the following press conference at 2:30 pm EST. For the first time since the Fed started its rate hike cycle in March 2022, an overwhelming majority expect a pause.<\/p>\n
The CME FedWatch tool currently indicates<\/a> a 95.3% probability that there will be no change at today\u2019s meeting. A breather, in other words, keeping interest rates at current levels, would give the central bank more time to observe the effects of its fight against inflation.<\/p>\n And big banks agree with these expectations. As macro analyst Ted (@tedtalksmacro) shows, only one of nine major banks, namely Citi, expects another 25 basis point rate hike. All other major banks such as Goldman Sachs, J.P. Morgan and Morgan Stanley expect a pause.<\/p>\n Most important, therefore, will be the new \u201cdot plot\u201d, the Fed members\u2019 projection of future interest rate path. Any correction to the upside will likely drive equities down and the dollar index (DXY) up, according to the analyst. Bitcoin and crypto are likely to follow this trend.<\/p>\n Happy hawkish pause day!<\/p>\n The market gives a 96% probability that the Fed pause today after hiking rates at every meeting since March 2022.<\/p>\n Major banks agree.<\/p>\n Most important, will be the new \u2018dot plot\u2019 \u2014> any revisions higher would spook equities lower and the dollar higher. pic.twitter.com\/M8UQkmXoZG<\/a><\/p>\n \u2014 tedtalksmacro (@tedtalksmacro) June 14, 2023<\/a><\/p>\n The US bond market is currently pricing in another rate hike by the Federal Reserve and a rate cut by the end of 2023, as Walter Bloomberg reported<\/a> today. However, it is likely to be more binary, says Michael Contopoulos, director of fixed income at Richard Bernstein Advisors, in a note.<\/p>\n Either the Fed does not cut, or growth falls off so hard it is cutting a lot,\u201d Contopoulos says. His guess is the former. \u201cHigher than expected CPI could very well tilt them to a hike. Otherwise, I think they will pause,\u201d he says.<\/p>\n The bond market is pricing in 200 basis points of rate cuts in 2024, the expert says, adding that this would mean the recession won\u2019t hit until next year. \u201cI tend to agree with that\u201d.<\/p>\n However, it is not inconceivable that the Fed could hike further after a pause. As the Bank of Canada (BoC) shows, this is entirely possible. The BoC raised rates again by 25 basis points (to 475 bps) in June after a two-month pause.<\/p>\n And the probability of another quarter-point rate hike in July is 63%, according to the CME FedWatch Tool. In this respect, the dot plot could be the trend-setting indicator today to gauge whether equities as well as Bitcoin and crypto are falling or rising.<\/p>\n If the dot plot sees any downward revisions, BTC and crypto are likely to start a new upward push. Otherwise, any upward revisions (\u201chigher for longer\u201d) of the projections would be rather bearish.<\/p>\n And as on-chain analyst Ali Martinez noted today, the Bitcoin price is on thin ice:<\/p>\n Notice the most important support zone is between $22,785 and $23,595 where 1.34 million wallets hold 450,000 $BTC.\u00a0On the flip side, #BTC faces stiff resistance between $26,000 and $28,250 where 5.18 million wallets bought 2.1 million BTC.<\/strong><\/p>\n At press time, the Bitcoin price remained relatively calm ahead of today\u2019s interest rate decision. In the 1-hour chart, BTC shows a good chance of a breakout from the current mini range (coincides with the $26,250 resistance to the upside of Ali) around the FOMC meeting, which should trigger another round of volatility.<\/p>","protected":false},"excerpt":{"rendered":" <\/p>\n The Bitcoin and crypto market faces the most important event of this week and probably the entire month of June today with the Federal Open Market Committee (FOMC) meeting of the US Federal Reserve (Fed) at 2:00 pm EST (release of the interest rate decision) and the following press conference at 2:30 pm EST. For the first time since the Fed started its rate hike cycle in March 2022, an overwhelming majority expect a pause.<\/p>\n The CME FedWatch tool currently indicates<\/a> a 95.3% probability that there will be no change at today\u2019s meeting. A breather, in other words, keeping interest rates at current levels, would give the central bank more time to observe the effects of its fight against inflation.<\/p>\n And big banks agree with these expectations. As macro analyst Ted (@tedtalksmacro) shows, only one of nine major banks, namely Citi, expects another 25 basis point rate hike. All other major banks such as Goldman Sachs, J.P. Morgan and Morgan Stanley expect a pause.<\/p>\n Most important, therefore, will be the new \u201cdot plot\u201d, the Fed members\u2019 projection of future interest rate path. Any correction to the upside will likely drive equities down and the dollar index (DXY) up, according to the analyst. Bitcoin and crypto are likely to follow this trend.<\/p>\n Happy hawkish pause day!<\/p>\n The market gives a 96% probability that the Fed pause today after hiking rates at every meeting since March 2022.<\/p>\n Major banks agree.<\/p>\n Most important, will be the new \u2018dot plot\u2019 \u2014> any revisions higher would spook equities lower and the dollar higher. pic.twitter.com\/M8UQkmXoZG<\/a><\/p>\n \u2014 tedtalksmacro (@tedtalksmacro) June 14, 2023<\/a><\/p>\n