Monday, 29 May 2023

Crypto News

Bitcoin limps into FOMC as flagging volume adds to BTC price hurdles

Bitcoin limps into FOMC as flagging volume adds to BTC price hurdles

Bitcoin (BTC) hit daily lows at the May 3 Wall Street open as markets counted down the hours to the Federal Reserve interest rate decision.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Fed set to hike into banking crisis

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching $28,152 on Bitstamp, down 2.2% from the day’s highs.

The pair continued volatility into the May 3 meeting of the Federal Open Market Committee (FOMC), the event which accompanies interest rate adjustments.

As Cointelegraph reported, market sentiment has priced in a 90%+ chance of the Fed hiking 0.25% to copy its March moves, with little expectations of a surprise instead.

The odds of the hike materializing stood at 83% at the time of writing, according to CME Group’s FedWatch Tool, around 15% lower than the previous day.

Fed target rate probabilities chart. Source: CME Group

As in March, however, the Fed would be hiking into a banking crisis exacerbated by already high interest rates. Multiple United States regional bank stocks fell considerably the day prior, raising concerns that the crisis has gone nowhere.

“The regional bank sector, KRE, just posted its 3rd biggest daily drop of this crisis, falling nearly 7%. Yet, we still have not received any comment from the FDIC or Fed,” financial commentary resource, The Kobeissi Letter, told Twitter followers on the day.

“In fact, the Fed is expected to RAISE interest rates again today. Meanwhile, no major headlines are reporting on the crisis anymore. The lack of attention to what’s happening to our system is incredibly concerning.”

Kobeissi referred to the U.S. SPDR S&P Regional Banking ETF, down over 30% year-to-date.

Arthur Hayes, former CEO of crypto derivatives giant BitMEX, held a similarly bleak view, predicting the downfall of several regional banks this week in a copycat move following the shutdown of First Republic Bank at the weekend.

“PACW indicating down 10%. Oh Baby! Will they make it to Friday or does the Fed have a surprise do us?” he queried in a subsequent tweet.

“Isn’t it great there is such a resilient banking system in Pax…

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