FOMC Decision to Shake Up Bitcoin and Altcoins? You Won’t Believe What Happens Next!

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The market, in its typical chaotic fashion, traded within a tight range on Wednesday. All eyes were on Bitcoin, altcoins, and even the dusty old assets like stocks and bonds, as the world awaited the first interest rate decision of the year. Buckle up!

Bitcoin, dear readers, clung to $102,000 like a cat avoiding a bath. Meanwhile, popular altcoins like Ethereum (ETH), Ripple (XRP), and Solana (SOL) had a mini-holiday, retreating by less than 5%. But oh, the laggards – DeXe, Raydium, Jupiter, and those adorably pudgy Penguins – plummeted by double digits. Ouch!

Enter the economists, with their gravitas and bespoke suits. Notable minds like Mohammed El-Erian expect the Federal Open Market Committee (FOMC) to keep interest rates steady at 4.50%. Sounds riveting, doesn’t it? 🙄

Today sees the first meeting of the year for the FOMC, the Federal Reserve’s top policy-making committee.
Look for the Fed to keep interest rates as is and issue a largely unchanged statement.
I suspect that Chair Powell’s goal for the press conference following the statement…

— Mohamed A. El-Erian (@elerianm) January 29, 2025

So, a pause isn’t surprising. They’ve dropped hints like breadcrumbs since December, when they cut rates by 0.25%. Their dot plot now points to just two cuts this year, down from four. Way to manage expectations, Fed. 🎯

Deciphering Powell’s statement will be the true drama. With recent economic data pointing to stubbornly high inflation – headline Consumer Price Index rising to 2.9% in December and core inflation above 3% – Powell’s unlikely to shift his stance. Oh boy, the suspense! 🤔

Adding fuel to the fire, if Donald Trump pushes forward with his import tariffs, inflation could remain elevated for longer. Risk assets like Bitcoin often tremble in the shadow of a hawkish Fed. Scared yet? You should be! 😱

Bitcoin price forms a risky pattern ahead of Fed

Bitcoin’s price, ever the drama queen, is giving us a risky double-top pattern – it’s like the twin peaks of the crypto world at $108,180. With a neckline at $88,913, this setup screams “bearish breakout.” Investors, hold onto your hats! 🎩

The bearish party doesn’t stop there. A bearish divergence pattern on the daily chart is showcased by the declining Money Flow Index, Relative Strength Index, and MACD indicators since November. This trifecta spells doom for our beloved Bitcoin. 😱

In essence, the double-top pattern, bearish divergence, and a hawkish Fed combined are like the perfect storm. Expect Bitcoin to possibly plummet to that neckline at $88,913. Pray it doesn’t, but prepare if it does. 💔

If Bitcoin bites the dust, altcoins like Ethereum, Solana, and Polkadot might just throw in the towel too. On the flip side, if Bitcoin defies the odds and hits a new all-time high, these altcoins may rally. Because, why not? Welcome to the rollercoaster of crypto! 🎢

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2025-01-29 19:23