The post Crypto News Today: FOMC Holds Rates Steady, Bitcoin and Ethereum Price Decline appeared first on Coinpedia Fintech News
After Federal Reserve Chair Jerome Powell said a September rate cut “could be on the table,” stocks soared to session highs. The tech-heavy Nasdaq 100 climbed 3.3% and the S&P 500 2%. However, the king crypto, Bitcoin (BTC), declined by 1.3% to $66,088, and Ethereum (ETH) fell roughly 1.11% to $3,313. Over 24 hours, the global cryptocurrency market cap also fell from 0.71% to $2.39 trillion.
However, market analysts say this is a short-term dip as Bitcoin and other cryptocurrencies despite being in the bear grip are showcasing bullish signals. Though BTC is still struggling to cross the $70K mark, it will be interesting to see how BTC reacts in August before the rate cuts.
Federal Reserve’s Decision
On July 31, the US Federal Reserve concluded a two-day Federal Open Market Committee (FOMC) meeting, opting to keep the benchmark interest rates unchanged at 5.25% – 5.50%, aligning with Wall Street expectations. The decision marked the eighth consecutive meeting without a rate change.
Market Rebound on the Way?
According to Santiment, the FOMC’s decision to maintain current interest rates led to an initial dip in cryptocurrency prices. Traders had hoped for a rate cut, which has not occurred since March 2020. A future rate cut could signal bullish trends for both stocks and cryptocurrencies, potentially uplifting markets for the remainder of 2024. Despite the initial selloff, markets are expected to stabilize unless another significant event impacts the crypto sector.
In the meantime, aggressive bull accumulation and increased negative sentiment among the crowd may set the stage for a substantial market rebound.
Understanding the Broader Impact
Despite the anticipation surrounding the FOMC meeting, the impact on cryptocurrencies was limited, as the rate pause had already been factored into prices. Previous Fed decisions have shown minimal major impact on Bitcoin prices.
Historically, FOMC actions affect all asset classes. In 2020 and 2021, Bitcoin and other altcoins soared as the Fed slashed rates to zero, only to reverse in 2022 when rates began to rise. Investors have moved trillions into low-risk assets, with money market funds amassing over $6.1 trillion, benefiting from an average return of 5%.
Moreover, Bitcoin’s immediate resistance is noted at $66,852, with support at $65,000. The RSI signals oversold conditions, suggesting possible further declines if the price falls below $65,900.
Investors are now closely watching the FOMC meeting for clues about inflation and economic growth, which could influence Bitcoin’s next move.