On Wednesday, October 11, the Federal Open Market Committee (FOMC) conducted a meeting to review the inflation numbers as US PPI data came higher than expected flashing a warning signal for the risk-ON assets. Bitcoin and the broader crypto market have come under further selling pressure on Wednesday.
The Fed officials are mulling one more rate hike before the year-end. Despite a few opposing opinions, all members unanimously concurred on the critical necessity of sustaining elevated interest rates until substantial evidence verifies the return of inflation to the desired annual rate of 2%.
The summary of the policy meeting from September reads: “A majority of participants judged that one more increase in the target federal funds rate at a future meeting would likely be appropriate, while some judged it likely that no further increases would be warranted”.
Any further decision of monetary tightening could put pressure on equities and the crypto market alike. On Thursday, the U.S. Labour Department will release more data on the Consumer Price Index (CPI) which will provide further clarity on the Fed’s future actions.
The rising number of outstanding Bitcoin futures and options might be a factor in the relatively lackluster performance of the cryptocurrency market in October. Historically, when Bitcoin’s open interest surpasses $7 billion, it often signifies a degree of investor greed. Presently, the open interest level is at $6.19 billion.
According to the crypto analyst known as Altcoin Sherpa, the present condition of Bitcoin resembles the period characterized by significant volatility, lacking a distinct breakout. The analyst draws a parallel to 2019 when Bitcoin’s price exhibited fluctuation, moving both above and below the 200-day EMA, accompanied by sporadic price spikes.