Bitcoin Traders Target Test of $53,000 Support as BTC Price Predictions Remains Bearish Following Fed Meeting
The Bitcoin (BTC) price is consolidating in the mid-$57,000s, down roughly 5% on the day, though up around 1.5% or $1,000 from earlier session lows as traders weigh the outlook for Fed rate cuts this year in wake of the latest policy announcement from the US central bank.
As anticipated, the Fed left interest rates at multi-decade high levels of 5.25-5.5% and slowed its balance sheet run-off.
The central bank will now allow its portfolio of assets to shrink by only $25 billion per month. Before, the central bank had been allowing its balance sheet to shrink by $60 billion per month.
That reduction was a little larger than some investors appeared to anticipate. That could explain the dovish market reaction to the initial policy announcement.
Bitcoin briefly pushed all the way to the mid-$59,000s and US stocks pumped, though these moves quickly reversed.
At current levels, Bitcoin is trading hands roughly in line with where it was prior to the Fed’s announcement.
As expected, Fed Chair Jerome Powell noted recent higher-than-expected inflation data readings so far this year.
POWELL: INFLATION DATA RECEIVED THIS YEAR HAVE BEEN HIGHER THAN EXPECTED
— *Walter Bloomberg (@DeItaone) May 1, 2024
Gaining confidence to cut interest rates will take longer than though, he commented.
POWELL: GAINING CONFIDENCE TO CUT WILL TAKE LONGER THAN THOUGHT
— *Walter Bloomberg (@DeItaone) May 1, 2024
The money market-implied odds that the Fed will have cut interest rates by 25 bps by September rose to 54% from 46% one day ago, as per CME data.
Meanwhile, the probability of no rate cuts this year dropped to 16% from 27% one day ago.
Net-net, the market interpreted the Fed meeting as slightly more dovish than expected, explaining the Bitcoin price bounce from
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