Bitcoin (BTC) soars past $27K amid Fed-induced volatility

Wednesday’s US Fed decision on interest rates remains the focal point as financial markets brace for a week of macroeconomic events. Meanwhile, Bitcoin has soared above $27K (for the first time since last month) as analysts expect hike pause during Wednesday’s rate decision.

Altcoins joined the upside party as the overall crypto market cap increased by 1.56% over the past day to $1.08 trillion. Bitcoin changed hands at $27,387 after gaining 3.08% in the past 24 hours.

Upcoming Fed decision

The US Federal Reserve will announce its rate decision on Wednesday (Sep 20). While August’s inflation surpassed estimates, analysts expect the Fed to pause rate hikes this week. FeWatch, which analyzes possible interest rate changes by the central bank, shows a 99% chance of a pause.

While players may have priced in rate increases, last week’s higher inflation readings might influence the Fed’s decision. That might increase market volatility in the coming two weeks.

The United States targets the 5.25% – 5.5% rate range. In June, the Fed projections displayed the median rate surging to 5.625% in 2023. Some analysts believe Wednesday’s decision would be a hawkish skip as the central bank would have another option to hike before year-end.

While FedWatch presumes the Federal Reserve will leave rates unaltered, market players will closely follow upcoming FOMC economic projections and the subsequent Jerome Powell’s speech. Also, it remains crucial to witness the next move by the Bank of Japan.

The interest rate pressure will likely dip by 2024 as the Federal potentially launches cuts. In June, officials predicted a 4.625% median rate by Q4 next year. Risk assets and Bitcoin will flourish amid rate cuts.