Will Fed decision start Bitcoin FOMO this week?
Bitcoin, the largest digital currency, has started the year very well. If you had received a bit of Bitcoin from some family member during Christmas, you’re currently looking at a 40% profit. That is more than you would have earned with shares or a savings account.
Traders now appear to be taking a short break around the $23,000 level as everyone awaits what Federal Reserve Chairman Jay Powell has to say about US interest rates.
If Bitcoin continues to grow this week, it will mainly be due to an interest rate decision by the Fed. Traders expect (and hope) Fed chairman Jay Powell to decide to still implement future interest rate hikes, but at a much slower rate than in recent months.
In other words, he is bound to give a positive statement about inflation and interest rates during the Federal Open Market Committee (FOMC) meeting. If not, you could see a selloff for both Bitcoin and stocks.
The fear and greed index for #BTC is almost neutral. 🙂— Crypto Port 12 (@CryptoPort12) January 28, 2023
But we are still having the #FOMO around. 😀
Stay cautious while trading. 🤞#Bitcoin #Crypto #Cryptocurency pic.twitter.com/0PhlmX7mg4
If it were very positive, Bitcoin FOMO (fear of missing out) could set in and the $30,000 target could indeed be achieved rather quick.
Joel Kruger, strategist at crypto platform LMAX Digital, agrees with that analysis. However, he cautioned if the Fed fails to do what traders hope and expect. Taking that split into account, Joel expects “the possibility of seeing Bitcoin go down $10,000 in the first half of the year or seeing its rally above $50,000 in the second half of the year.”