Fed will react to inflation data on Wednesday – Bitcoin next move?

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As an experienced analyst, I believe that the Federal Reserve’s upcoming decision at the FOMC meeting will significantly impact both the traditional financial markets and the crypto market, specifically bitcoin. The Fed is in a difficult position as rising inflation data adds to economic uncertainties, forcing them to navigate between preventing a potential recession and keeping inflation under control.

As a researcher studying the economic landscape, I can tell you that with the US economy facing increasing uncertainty, the Federal Reserve’s response to poor inflation figures will be discussed at the upcoming FOMC meeting on Wednesday. It is anticipated that interest rates will remain unchanged in this scenario. Regarding the impact on Bitcoin, it remains to be seen how this decision will affect the cryptocurrency market. Stay tuned for further developments.

Fed between a rock and a hard place

As an analyst, I’d rephrase it as follows: The recent increases in PCE, PPI, and CPI inflation indices present me with a challenging predicament. If inflation persists or worsens, and there are signs of an impending economic recession in the US, my role as a Federal Reserve decision-maker becomes even more complex. I’m essentially caught between two unfavorable scenarios: allowing inflation to escalate or implementing aggressive monetary policy that could potentially slow down economic growth.

As a researcher studying economic policies, I would argue that easing monetary policies could be beneficial in mitigating the impact of a potential recession and boosting the recovery process. However, it’s essential to consider that such a move could also exacerbate existing inflationary pressures, leading to an unwanted increase in prices. Therefore, striking a balance between these competing priorities would require careful consideration and monitoring of economic conditions.

From an analyst’s perspective, it might seem like a losing proposition for the US economy with its sky-high debt. However, some experts argue that inflation could offer a solution for the government to repay its debt using cheaper dollars. This concept is often referred to as “printing money” or “inflating away the debt.” While this approach may benefit the government, it could pose significant challenges for the average US citizen who relies on a fixed income and struggles to make ends meet from one paycheck to another.

As the April jobs report is set for release on Friday, there’s a possibility of market turbulence that could impact bitcoin and the cryptocurrency market significantly. This instability might even challenge bitcoin’s crucial $59,000 support level.

Bitcoin still within its bull flag

As an analyst, I’m observing that Bitcoin ($BTC) is currently trading within a sideways pattern, which we refer to as a “bull flag.” The lower boundary of this flag aligns with the support level at around $59,000. In order for Bitcoin to resume its bullish trend, it needs to bounce back from this support level once more.

Bitcoin support levels

Looking at the larger picture on a weekly basis, I can identify a distinct support zone for Bitcoin (BTC). Should this support be breached, the next levels of potential buying opportunities would emerge at $55,000, followed by $51,000, and even potentially extending down to $46,000.

Should the price drop down to $46,000 again, many would view this as a strong recovery signal that could potentially extend the ongoing bull market. Additionally, the appearance of bullish divergence in the weekly chart may provide further insight into the price trend.

As a researcher studying the financial markets, I’m pondering over the current state of affairs for bitcoin. It’s true that its price may seem dismal at present. But as I delve deeper, I can’t help but wonder: How grim is the situation really for the US dollar and government bonds?

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2024-04-29 13:02