Bitcoin Pauses Ahead of FOMC

Uk Jin

Summary

Bitcoin is taking a breather around $90,000 ahead of the FOMC meeting.
Experts say the end of Fed tightening and interest rate cuts could act positively for Bitcoin's rise.
JP Morgan analyzed that if MicroStrategy remains in MSCI indices in January next year, Bitcoin could hit a new all-time high.

Crypto Now

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Bitcoin is trading around $90,000. It appears to be taking a breather ahead of the U.S. central bank's Federal Open Market Committee (FOMC) meeting.

According to CoinMarketCap on the 7th, Bitcoin dipped slightly after recently recovering to $90,000. Concerns over Yen carry trade liquidations pushed it down to the $85,000 level, but it then quickly recovered. Market attention is focused on the FOMC meeting on the 9th–10th (local time), a variable that could determine whether Bitcoin's rally continues. At present, a 0.25 percentage point cut in the policy rate is likely. According to the Chicago Mercantile Exchange (CME) FedWatch, market participants see an 87% chance of a Fed rate cut.

A slowdown in the labor market also supports the possibility of Fed easing. According to the Automatic Data Processing (ADP) report on the 3rd, private employment fell by 32,000 last month. This figure is far below the market forecast (an increase of 5,000).

Experts are offering positive outlooks. Arthur Hayes, co-founder of BitMEX, said, "U.S. dollar liquidity has bottomed out," and "the end of the Fed's tightening will lead Bitcoin's next upward phase." He added, "If such an environment is established, Bitcoin's year-end price could surge to $250,000."

There is also technical analysis suggesting Bitcoin is forming a bottom. U.S. crypto media CoinDesk explained, "The recent correlation coefficient between Bitcoin and the Nasdaq-100 index recorded -0.43," and "in the past, Bitcoin rebounded shortly after similar levels of 'decoupling' occurred."

JP Morgan analyzed, "If MicroStrategy remains in major MSCI indices in January next year, Bitcoin's price could recover to pre-October crash levels and possibly set a new all-time high."

However, there are also analyses that growing market concerns about the financial conditions of cryptocurrency-holding companies could act as negative factors for Bitcoin's price.

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