"Downside pressure on Bitcoin is building"… Seven central banks to set rates next week

Central banks in seven countries, including the US Federal Reserve (Fed), will set benchmark interest rates next week. Analysts say downside pressure on Bitcoin (BTC) could intensify if the Iran-triggered spillover from the Middle East conflict reinforces a hawkish (tightening-biased) stance among central banks.

According to CoinDesk on the 11th (local time), the Fed, the Bank of Japan (BOJ), the European Central Bank (ECB) and the Swiss National Bank (SNB), among others, will sequentially announce policy-rate decisions next week. "Next week, seven central banks will announce rates amid the possibility that global inflation could reignite as oil prices rise due to the (Iran) war," CoinDesk reported, adding that it "could be a major inflection point for markets, including Bitcoin."

Markets had initially expected key central banks to cut rates or hold steady. However, inflation concerns have grown amid the Middle East conflict that flared up after the US launched airstrikes on Iran, prompting speculation that major central banks could move toward rate hikes. "(Central banks) are likely to move swiftly to contain upward pressure on prices," CoinDesk said, adding that "if (major central banks) send hawkish signals next week, it could trigger downside volatility across risk assets, including Bitcoin."

Attention is also focused not only on the Fed but on the BOJ’s rate decision scheduled for the 19th (local time). Japan’s policy rate is likely to have a direct impact on Bitcoin prices due to risks tied to an unwind of the "yen carry trade." "Rising international oil prices are increasing the burden across Japan’s economy," CoinDesk said, adding that "next week’s BOJ rate decision could be an important inflection point for Bitcoin."