- The upcoming FOMC meeting will highlight what the crypto community should expect to happen to the market in the next few weeks as Bitcoin eyes a price uptrend.
- Following weeks of consolidation for the leading digital asset, BTC recorded a brief bounce following positive CPI data released recently.
The last seven days have seen the largest crypto asset by market cap, Bitcoin (BTC), record a slight gain of more than 1.5 percent as the crypto ecosystem braces for another rollercoaster ride. The anticipated release of the consumer price index (CPI) data will be the game changer for BTC and the entire crypto market.
What to Expect from the FOMC’s Meeting
December 14 signifies the year’s final meeting of the Federal Open Market Committee (FOMC). As expected, members must deliberate and release their updated predictions for inflation and a possible interest rate hike. Also, the Fed will release its last dot plot report for the year.
This dot plot is only released four times a year– March, June, September, and December and represents a chart of the FOMC’s economic forecasts, such as unemployment rates, gross domestic product (GDP), and projected inflation for the months ahead. Furthermore, based on the dot plot, all committee members are expected to publish their opinions regarding the impact of a potential interest rate increase in the long term.
Investors, on their part, can utilize the market information to see how the compromise on long-term interest rates can affect the broader financial markets. As a result, market players and BTC investors would closely observe the official inflation projection for next year and the expected interest rate for the same period.
According to renowned economic journalist Colby Smith, the last dot plot reflected the decision of most members who voted for a stoppage of 50 basis points for December. However, the question to emerge in the coming week is whether the Jerome Powell-led Fed will favor a slow pace rate hike of 25 basis points.
Will Bitcoin See an End-of-Year Rally?
Following weeks of consolidation for the leading digital asset, BTC recorded a brief bounce after positive CPI data. In addition, the US Department of Labor reported that previous CPI performance has been woeful, with roughly a 0.1 percent jump between October and November. Hence, the Fed hiked inflation rates last month by 7.1 percent as opposed to the forecasts of 7.3 percent. Meanwhile, the positive CPI data has pushed BTC toward the $18,000 price level, a first in recent weeks.
At the time of writing, BTC was trading at $17,833, following an increase of roughly 2.4 percent in the last 24 hours, according to current Coingecko data. As a result of the price surge, BTC attained a new four-week high, with investors keeping a close watch on the asset’s price movement for a bottom that could kickstart a fresh price uptrend. However, it is worth noting that negative CPI data and a stricter move by the Fed regarding inflation rates can upset any possible rally for BTC, as was the case in the April and August price reversals.
Based on the Fed’s recent antecedents, analysts expect that the FOMC’s meeting outcome will indicate that the Fed will not raise rates aggressively.
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