Bitcoin Price Prediction: BTC Could Reach $70,000 as FOMC Meeting Minutes Reveal Concerns About Inflation
Arslan Butt
Last updated:
May 22, 2024 21:29 EDT
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4 min read
Bitcoin Price Prediction
The most recent meeting of the Federal Reserve has shown growing concerns about inflation among officials, leading to hesitancy in reducing interest rates. This decision to maintain the short-term borrowing rate at a 23-year high of 5.25%-5.5% has substantial implications for the economy and the Bitcoin price prediction. Let’s explore further.
Federal Reserve Officials Express Concerns About Inflation, Unlikely to Cut Interest Rates Soon
During their latest meeting, Federal Reserve officials expressed increasing worries about inflation, with many members hesitant to move forward with interest rate reductions.
Meeting Details: The minutes from the April 30-May 1 Federal Open Market Committee (FOMC) meeting revealed concerns about the persistence of inflation. Despite some easing over the past year, recent data has shown significant increases in both goods and services prices.
Fed’s Target: The Federal Reserve aims for a 2% inflation rate, but current indicators show prices increasing well above this target. This persistent inflation has led some policymakers to consider further tightening of monetary policy if necessary.
The FOMC decided to keep the short-term borrowing rate in the 5.25%-5.5% range, a 23-year high. This decision was based on data indicating continued solid economic growth.
Since then, there have been minor improvements, with the April consumer price index showing a 3.4% annual inflation rate, slightly lower than March.
However, consumer sentiment surveys indicate rising concerns about inflation.
Risks and Concerns
Fed officials noted several upside risks to inflation, including geopolitical events and the impact on low-income consumers. Some attributed early-year inflation increases to seasonal factors, while others warned against dismissing these broad-based moves.
Concerns were also raised about consumers turning to riskier financing methods, such as increased credit card use and buy-now-pay-later services.
Despite optimism about growth prospects, officials expect some moderation this year. They believe inflation will eventually return to the 2% target but are uncertain about the timeline and the impact of high-interest rates.
Market Expectations
Since the meeting, Fed officials have maintained a cautious tone. Fed Governor Waller emphasized the need for “several months” of positive data before considering rate cuts.
Chair Jerome Powell echoed the need for patience, suggesting the Fed will wait for restrictive policies to curb inflation. Futures pricing indicates a 60% chance of the first rate cut in September, with lower expectations for a second cut in December.
Impact on Bitcoin: Rising interest rates could decrease Bitcoin’s appeal as an inflation hedge, potentially leading to price volatility.
Bitcoin Price Prediction
Bitcoin (BTC/USD) is currently trading at $69,553, showing a modest increase of 0.63% over the last 24 hours. The pivot point, marked by the green line at $69,219, serves as a crucial level, indicating the primary trend direction.
Above this pivot point, the immediate resistance levels to watch are $72,030, $73,734, and $75,480. These levels represent potential barriers where selling pressure could increase, challenging further upward movement.
On the downside, support levels are identified at $67,549, $65,949, and $63,901. These levels could provide a cushion against declines, offering potential entry points for buyers.
The presence of an upward trendline further bolsters this bullish outlook. However, a break below the pivot point of $69,675 could trigger a sharp selling trend.
In conclusion, the Bitcoin price prediction remains bullish at $69,675, but a breach below this level could lead to significant downside pressure.
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Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
