By Marcus Sotiriou, Analyst at the publicly listed digital asset broker GlobalBlock (TSXV:BLOK).
Bitcoin and the crypto market saw a significant bounce yesterday, before finding resistance at $19,666 – the 2017 bull market top, a key resistance. Bitcoin remains below $20,000 for now as investors are very cautious ahead of the Federal Reserve decision tomorrow, followed by a news conference with Chair Jerome Powell.
The market is currently pricing in a probability of an 82% chance of a 75 basis point rate hike, and a 18% chance of a 100 basis point rate hike. As the chance of at least a 75 basis point rate hike has been fully priced in by investors, I think a 75 basis point rate hike could be priced in, in the short-term. However, central banks are very aggressive so a short-term rally may be short-lived.
In addition to the Federal Reserve decision tomorrow, there is the Bank of Japan monetary policy decision and Bank of England interest rate decision on Thursday, as well as the US Conference Board leading index – initial jobless claims. We are therefore set up for a very volatile week as investors gain clarity on the decisions of central banks.