- Fed's interest rate decision and the FOMC press conference will set the tone for Bitcoin price and its 2023 rally.
- If this event on May 3 fails to trigger a move in BTC, investors need to wait for the NFP event on May 5.
- The $25,000 and $35,000 are the next key levels that the big crypto will eye if these macroeconomic events provide a firm directional bias.
Things are starting to get interesting for cryptocurrencies again, especially with the spike in volatility over the weekend. With two major macroeconomic events scheduled, traders can expect a lot more.
Let’s break down the events, key levels and narratives for this week.
- Fed Interest Rate decision on May 3 at 08:30 PM UTC
- Nonfarm Payrolls (NFP) on May 5 at 12:30 PM UTC
Read more: PEPE holders realise massive profits as Pepe Coin rallies 300% over the weekend
FOMC
The Fed Interest Rate decision on May 3 aka, Federal Open Market Committee (FOMC), will set the tone for this week, but the deciding factor or event will still be the NFP.
The Federal Reserve is likely going to raise the interest rate by 25 basis points and stick to its plans for curbing inflation. While this information is widely known, the event is unlikely to cause any spike in volatility. However, a deviation from the known variable, which is a 25 basis point hike, would induce a much higher spike in volatility. Say, for example, if the Fed announces a 50 basis point hike, now that would, without doubt, trigger a whiplash.
This move would be hawkish and promote a stronger US Dollar, causing the stock market and Bitcoin price to tank in the short term.
The FOMC conference is something that will cause the markets to move. Jerome Powell, the Federal Reserve Chairman’s speech after the interest rate decision, has a higher probability of causing massive spikes in volatility and triggering a directional move.
Read more: Fed likely to signal May’s hike may be the last one – Wells Fargo
NFP
The jobs report, or the NFP data release, is a key event that plays a pivotal role in determining if the directional move assumed after the FOMC conference will continue or not. According to the current forecasts, NFP is supposed to come in lower than expected if the deviation from the forecast and actual numbers is negative, but by a large magnitude, it will magnify the effects of the interest rate decision.
A reduced NFP number would suggest that Fed’s plan to curb inflation by raising interest rates is working.
Read more: Bitcoin Weekly Forecast: Fed’s interest decision will be key to BTC directional bias
Conclusion
In the past year or two, every time Fed has raised interest rates, Bitcoin price has crashed in the short-term but has ultimately rallied. If there is a higher than 25 basis point hike followed by a negative deviation in the NFP numbers, it is likely going to propel BTC to $36,000.
Also read: Bitcoin Weekly Forecast: Fed’s interest decision will be key to BTC directional bias
Top 3 reads
Is Bitcoin price set to shine as stock market investors “Sell in May and Go Away”?
Ripple price to crash 40% as bulls do not respect handles
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.