Upcoming FOMC Meeting: Will It Bring a Storm to the Coin Market?

▲ Jerome Powell, Chairman of the US Federal Reserve, Bitcoin (BTC)/ChatGPT generated image ©

As the Federal Open Market Committee (FOMC)'s benchmark interest rate decision, which draws the attention of investors worldwide, approaches, the prevailing outlook for the virtual asset market is that it will maintain a calm sideways trend rather than an explosive rally or sharp decline. With market indicators pointing to a rate freeze as a foregone conclusion, a dramatic directional shift for major coins, including XRP (Ripple), is unlikely to be expected for the time being.

According to the cryptocurrency media outlet Bitcoinist on April 25 (local time), the results of the eight annual FOMC meetings are a key variable determining the direction of the virtual asset market. This is because the market fluctuates between heaven and hell depending on the interest rate direction decided through the announcement by the Federal Reserve (Fed) Chairman.

Typically, when the Federal Reserve (Fed) adopts a hawkish stance and raises interest rates, investors' risk aversion sentiment strengthens, causing the entire financial market to shrink, and the coin market also experiences a sharp decline. Conversely, if interest rates are cut with a dovish stance, investors flock to risky assets in pursuit of higher returns, leading to an explosive market rally and euphoria.

On the other hand, if a neutral decision is made to maintain interest rates at their current level, the market tends to continue its existing trend without significant volatility. According to the Chicago Mercantile Exchange (CME) Group, the next meeting that will determine investors' fate is scheduled for April 29, with official results announced after two days of discussion.

Market attention is already focused on a rate freeze. According to data from the FedWatch tool, the probability that the benchmark interest rate, currently between 3.5% and 3.75%, will remain unchanged is an overwhelming 99.5%. In contrast, the probability of a rate cut is 0%, and the probability of a rate hike is only 0.5%, virtually indicating no change.

These overwhelming indicators mean that the upcoming meeting results will not deliver a surprising shock to the market. Therefore, the virtual asset market, including XRP, is analyzed to maintain its current trajectory smoothly for the time being without sharp price fluctuations due to this announcement.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*