The US Financial Markets Turn Negative After Federal Reserve Takes Hawkish Stance
Following the September 2023 Federal Open Market Committee (FOMC), the US financial markets experienced a downturn. The Dow Jones Industrial Average (DJIA) fell by 0.4%, the S&P 500 Index dropped approximately 0.9%, and the Nasdaq Composite Index suffered a 1% plunge. Additionally, the price of Bitcoin also corrected by 2%.
Analysts Predict Local Bottom for BTC
Despite the corrective action, crypto analysts believe that Bitcoin could potentially recover and enter a bullish phase at any time. CrediBULL Crypto, a popular analyst, suggests that trader sentiment towards liquidations will determine the level of downward risk. The analyst predicts that BTC’s ideal downside risk is around $25,500, with further downside possible just under $25,000.
“If RED (below $25,000) is our bottom, then this flush may be the final move of this week’s long corrective structure that will ideally reset Bitcoin open interest and clear the way for the next leg up.”
US Federal Reserve Chair’s Remarks Impact BTC
During a post FOMC press conference speech, US Federal Reserve Chair Jerome Powell stated that officials have voted in favor of maintaining a restrictive monetary policy. Powell’s remarks regarding another rate hike being likely led to negative market reactions. Currently, the target rate stands at 525-550 bps.
What Lies Ahead for BTC?
Bitcoin has been trading sideways around the $26,000 level for the past five weeks. Despite winning the Grayscale lawsuit in late August 2023, which failed to boost BTC’s price, excitement surrounding spot Bitcoin ETFs has dwindled in recent times.
Hot Take: Bitcoin Faces Uncertainty as Markets React to Fed’s Hawkish Stance
The US financial markets experienced a downturn following the Federal Reserve’s hawkish stance during the September 2023 FOMC. Bitcoin also faced a correction amidst this market turbulence. Crypto analysts are optimistic about a potential recovery for BTC, but the extent of downward risk depends on trader sentiment towards liquidations. The recent remarks by US Federal Reserve Chair Jerome Powell regarding another rate hike have further impacted the market. As Bitcoin continues to trade sideways, uncertainty looms over its future, with the euphoria around spot Bitcoin ETFs fading away.
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