What is the FOMC meeting?
FOMC stands for Federal Open Market Committee.
This is an important meeting of the Federal Reserve of America where discussions are held on the country's monetary policy — particularly decisions regarding interest rates and economic conditions.
How does the FOMC affect the crypto market?
1. Interest Rate Decisions:
If the Fed raises interest rates
So people pull their investments from risky assets like crypto and put them into safe places (like bonds or dollars).
Conclusion: Crypto prices may decrease.
If the Fed lowers interest rates or keeps them steady
people start taking risks for more profit, and investment in crypto increases.
Conclusion: Crypto prices may increase.
2. Market Sentiment:
Hawkish Tone:
When the Fed talks about raising interest rates to control inflation, it is called Hawkish.
Impact: Pressure on the market, crypto may go down.
Dovish Tone:
When the Fed shows softness to support the economy and keeps rates low, it is called Dovish.
Impact: Investors are willing to take more risks, crypto may go up.
3. Liquidity (Availability of Money):
Tightening:
Increase in interest rates or withdrawing money from the market.
Conclusion: Less money in the market, negative impact on crypto.
Loosening:
Decrease in interest rates or injecting more money into the market (Money Printing).
Conclusion: More money in the market, support for crypto.
4. Sudden Volatility Spike:
During or after the FOMC meeting, the crypto market — especially Bitcoin, Ethereum, and other altcoins — often sees rapid price fluctuations.
The reason is that traders react quickly to the Fed's statements or decisions, especially if something is unexpected.
