Will FOMC minutes give the crypto market a boost? Expert’s view
- Bitcoin price has retreated below $24,000 ahead of FOMC minutes on Wednesday.
- Wall Street also opened lower, with S&P 500 shedding nearly 1% in early trades.
- Crypto analyst Marcus Sotiriou says Bitcoin could trade lower over coming weeks.
Bitcoin (BTC/USD) has retreated from recently hit two-month highs above $25,000 to currently test support near $23,300, with intraday losses of about 2%.
As the bellwether crypto pares recent gains, the outlook across risk asset markets paints a similar picture. The major US indexes are also down in early trading on Wednesday – the S&P 500 has shed nearly 1%, the Nasdaq is down 1.6% and the Dow Jones Industrial Average has declined more than 200 points, or about 0.6%.
For the equities market, the low open comes after a confluence of negative sentiment catalysts on Wednesday morning. These include poor retail earnings, uninspiring retail sales data, and UK inflation figures.
Crypto analyst on FOMC and Bitcoin priceCopy link to section
The outlook for risk assets, which Bitcoin has mirrored more and more in 2022, suggest the bears might not be done yet.
However, Marcus Sotiriou, an analyst at UK-based digital asset broker GlobalBlock, thinks a clearer picture could emerge later Wednesday in terms of the Federal Open Markets Committee (FOMC) minutes.
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Bitcoin’s volatility has fallen over the past week or so, yet sellers have been dominant, as there is uncertainty around FOMC minutes being released this evening. The minutes will give an indication of the Federal Reserve’s stance and when they may begin to slow the pace of rate hikes.”
The US Federal Reserve recently hiked interest rates by 0.75%, but inflation data came in lower-than-expected month-over-month. Can the FOMC commentary give BTC and the broader crypto market a timely boost?
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Sotiriou said in a note to clients:
Technical analysis tells us that Bitcoin faces a critical test over the coming days, as the 200 weekly moving average sits just below the current price of $23,700, at around $23,000 – failing to hold this level, will suggest there is further downside to come over the following weeks and the market’s reversal may be delayed.”