Analysts: Fed's Dovish Signal Could Benefit Bitcoin

Huo Xing Finance reports, according to CoinDesk, analysts say that any dovish signal from the Federal Reserve could benefit Bitcoin. There is significant divergence in the market over whether the Fed will raise rates on Wednesday—CME FedWatch data shows a 70% probability of holding rates steady and a 30% chance of an unexpected 25-basis-point hike. Block Scholes analyst Thahbib Rahman noted that Fed Chair Kevin Warsh’s reduced use of forward guidance has intensified market uncertainty, making this FOMC meeting the most uncertain in years. Since July, Bitcoin has risen approximately 6%, while the S&P 500 has remained flat and the semiconductor sector has declined nearly 20%. Vetle Lunde, Research Director at K33 Research, stated that while Nasdaq had previously been strong and overextended, Bitcoin has continued to consolidate near multi-year lows, with the correlation between the two weakening; the impact of this week’s FOMC meeting on BTC may be limited. Rahman added, “Any dovish signal could drive Bitcoin to continue outperforming.”