Will Powell, FOMC Rescue Bitcoin Price?

The price of Bitcoin, the most well-known cryptocurrency worldwide, is under pressure as it approaches $60,000. As of this writing, Bitcoin is trading at $62,727, down -1.88% from its peak.


The Federal Reserve is the focus of attention in the cryptocurrency market this week due to the highly anticipated FOMC meeting and Chairman Powell’s expected remarks. Analysts are tempted to try to figure out what the US interest rate policy meeting would mean for the cryptocurrency market. Now let’s unpack what it could bring about.

The prospect of Bitcoin reaching $100,000 in one go has essentially vanished. The perma-bulls find the price action boring, as sellers are energised by Bitcoin’s decline. Based on the rate at which the market has been selling Bitcoin, bears are relentless and believe the price of the cryptocurrency will reach $60,000 in the next five trading days.

Analyzing Jerome Powell and FOMC: Will the Federal Reserve Save the Price of Bitcoin?

Things could get interesting this week. The world’s most valuable coin saw demand surge after last week’s optimistic TSLA earnings call, which encouraged a change in attitude to one of risk-taking. The market is focused on Jerome Powell, the chair of the US Federal Reserve, in addition to the approaching FOMC.

Early in 2020, the Fed altered its monetary policy to one of fiscal stimulus, which boosted market prices and caused Bitcoin to reach $70,000 by November 2021. However, the cryptocurrency market is currently uneasy as investors tensely anticipate the Federal Open Market Committee’s (FOMC) interest-rate decision on May 1 due to ongoing CPI and geopolitical tensions in the Middle East.

If anything, the Fed’s decision on interest rates would have a significant impact on the price of Bitcoin and the whole cryptocurrency scene—especially if they chose to cut rates from 5.50 percent—and would further feed the market’s risk-on mood.

Inflows into Bitcoin ETFs, which have so far outperformed bond ETFs, may increase as a result in 2024. Although there are differences in analyst estimates for the FOMC meeting, the general consensus in the Bitcoin market is that the Federal Reserve will maintain its current level of interest rates. Aside from the interest rate statement, 45 minutes later volatility is anticipated.

Traders will be especially focused on Jerome Powell’s news conference at this point, as it has the potential to provide significant information about the direction of the central bank’s monetary policy going forward.

Powell’s tone conveys the important position of the Federal Reserve, particularly in light of recent economic data. Data released this week indicated that real GDP expanded by 1.6% in 012024, nearly 50% less than the +3.4% growth seen in 012023.

Notably, the advance GDP dropped far below the economists’ projected growth of +2.5%, indicating slower development in the US. Crypto sentiment has suffered as a result of worries about a potential delay in the Federal Reserve’s anticipated rate decreases, which have been exacerbated by the unexpected slowdown in GDP growth and rising inflation.

According to March’s inflation figures, price pressures in the US increased by +2.7%, bringing the annualised headline inflation rate to +3.4%—much higher than the Federal Reserve’s target of +2%. The US labour market has been strong at the same time, with more job opportunities than available candidates.

Experts now predict that Powell may decide to hold interest rates higher longer than anticipated or perhaps raise them in order to combat inflation due to a combination of slow GDP growth and mounting price pressure.

How Does This Affect the Price of Bitcoin?

Growing Withdrawals From Spot Bitcoin ETF Issuers:

Even after the halving, it’s possible that Bitcoin values would drop if the Federal Reserve decides to raise rates, as they did in 2022. The problem is made worse by the surge in spot Bitcoin withdrawals that has occurred recently, which suggests investor anxiety.

According to Lookonchain statistics as of April 26, GBTC and the other nine spot Bitcoin ETFs—which include Fidelity and BlackRock—saw a decline of more than 5,000 BTC, or more than $320 million. The price of Bitcoin will probably drop below $60,000 if outflows continue, which might cause market panic and lead to an altcoin dump, which could be a fantastic opportunity.