Wednesday’s highly anticipated Federal Open Market Committee (FOMC) meeting could set the stage for a bullish run in the cryptocurrency market if one important indicator aligns, according to a crypto analyst.
What Happened: Crypto analyst Ted highlighted the importance of today’s FOMC announcements, saying “the market is priced for 1-2 cuts by December.” He referenced the Federal Reserve’s previous indications from March, which suggested 2-3 rate cuts.
“Today’s new dot plot will provide insight into just how likely rate cuts in the U.S. are this year.”
The “dot plot,” a graphical representation of FOMC members’ rate projections, is a crucial piece of information for market participants.
Ted emphasized that the next dot plot won’t be released until September, making today’s release particularly significant.
“Expect the market to hold onto this piece of information for the best part of the coming few months,” he said.
For crypto enthusiasts, any deviation from the March dot plot could have substantial implications. “More rate cuts = bullish for crypto + risk, while the opposite is also true,” Ted noted.
He pointed out that crypto bulls are hoping for a shift lower in the dot plot, which would signal FOMC members’ inclination towards lower rates.
Also Read: Solana, Ripple ETFs Unlikely In Near Future, Says Cboe VP
In addition to the dot plot, the Consumer Price Index (CPI) report adds another layer of complexity.
Ted remarked, “If CPI meets or falls below expectations, that will continue the disinflationary trend and should help risk assets higher on speculation of a dovish Fed meeting later today.”
He elaborated that a CPI miss lower than 3.4% for headline inflation and 3.5% for core inflation could provide a significant boost to crypto prices.
A dovish outlook with indications of rate cuts could ignite a bullish trend, reinforcing the perception of cryptocurrencies as a viable hedge against traditional financial uncertainties.
Following the lower-than-expected CPI data release earlier this day, Bitcoin BTC/USD and Ethereum ETH/USD rallied significantly, boosting hopes for a dovish outlook.
What’s Next: In light of these developments, the upcoming Benzinga Future of Digital Assets event on Nov. 19 promises to be a crucial gathering for industry stakeholders.
Read Next: Bitcoin Soars Above $69K On Improved Inflation Data Print
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