Due to the insolvency of several US banks and the ongoing liquidity problems of 186 US banks, as well as the acquisition of Credit Suisse by UBS Bank, Bitcoin and crypto are more bullish than ever. On Sunday, the price of Bitcoin rose above $28,400.
About 15 years after the bankruptcy of major US bank Lehman Brothers and the Great Financial Crisis, Satoshi Nakamoto’s vision is becoming more and more real. As the US banking system faces another major crisis and bailouts, investors are now fleeing to Bitcoin.
This is literally what is written in genesis #Bitcoin blocking.
It is designed for this environment. pic.twitter.com/xiTV4Cx0jC
— _Checkɱate 🔑⚡🌋☢️🛢️ (@_Checkmatey_) March 17, 2023
However, investors in the Bitcoin and crypto space should continue to monitor economic and financial data this week. The key event will be the FOMC meeting and the interest rate decision by the US Federal Reserve Bank (Fed). In addition to monetary policy decisions, the Fed will also publish updated projections.
Additionally, there is a relatively minor data point coming this week, which may have an immediate impact on the price of Bitcoin. On Tuesday, US home sales figures for February will be released. On Thursday, US new home sales figures will follow.
Closing out the week on Friday will be the latest US Durable Goods Orders for the month of February. However, no data point is as important as the Fed’s decision.
Bitcoin And Crypto Investors Should Watch The Fed
On Wednesday, the Fed will announce its interest rate decision at 2:00 pm EST. At the next press conference at 2:30 pm EST, investors will follow the Fed chairman’s statement on future monetary policy.
The FOMC meeting is likely to be the most important of the year, as the Fed will publish a dot plot, which summarizes the FOMC’s projections for the federal funds rate over the long term, for the first time in a while and especially since banking. the crisis began. The projected pivot earlier this year will be bullish for Bitcoin.
According to the CME FedWatch tool, only a slim majority of 53% of analysts still expect a 25-basis rate hike in March. A large 47% even expect to rest.
As recently as March 7, Powell testified before the Senate Banking Committee that the Fed would likely have to raise rates “more than previously expected” in response to sticky inflation. Most analysts expect a rate hike of 50 basis points.
However, in light of the banking crisis, the forecast has been completely reversed. Fed Chairman Powell has been criticized for problems in the banking sector, as historically rapid interest rate hikes have led to problems in the banking sector. Many market players are calling for a shift away from hawkish monetary policy.
More rate hikes carry the inherent risk that more banks will go bankrupt. This is also why Goldman Sachs was the first major bank to predict that it does not expect a rate hike in March due to stress in the banking sector. Deutsche Bank and Barclays have since echoed the forecast.
“Given recent stress in the banking system, we do not expect the FOMC to deliver a rate hike at its March 22 meeting with uncertainty about the path beyond March,” Goldman Sachs said. stated.
For Bitcoin, a pause in rate hikes and even an increase of just 25 basis points should add bullish momentum to the market, although much will also depend on Powell’s assessment of the current situation at the FOMC press conference.
Pundits will also pay close attention to Powell’s comments on the Bank Term Funding Program (BTFP) and new swap lines with five other global central banks to hint at fiscal policy changes needed in the near term. In any case, Bitcoin investors should expect a volatile Wednesday.
At press time, Bitcoin price is trading at $28,107, looking very bullish. As the 1 hour chart shows, the hourly uptrend is still intact.
Featured images from iStock, charts from TradingView.com