The Fed's decision to keep interest rates unchanged has multiple impacts on the cryptocurrency market.
First, the dollar may strengthen due to its hawkish stance, suppressing the prices of risky assets such as Bitcoin, and some funds may flow back to traditional safe-haven assets. Second, the risk of economic stagflation exacerbates market uncertainty, which may lead to higher volatility in the crypto market and pressure on leveraged positions to be liquidated.
In addition, the ambiguity of the policy path has weakened expectations for rate cuts, and the continued high interest rate environment will increase the opportunity cost of holding cryptocurrencies. If Powell releases a tougher anti-inflation determination in his speech in the early morning, it may trigger a short-term correction in the crypto market. It is necessary to focus on whether the key support level of Bitcoin at $90,000 is lost. However, if a policy shift signal is accidentally revealed, it may stimulate a rebound in market risk appetite.
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