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Bitcoin News: Amid continued FUD around the banks collapse, the crypto collapse showed promising signs of recovery in the last few days. Minus the failure of the Silicon Valley Bank and the Signature Bank, the crypto market would potentially have been weighing in the US Federal Reserve’s interest rate hike decision in the upcoming meeting. But the rate hike was part of the very reason behind the devastating bank runs. These were not mere bank failures, but were the second and third largest bank collapses since the 2008 recession.
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Owing to the dangers to financial sector from rising interest rates, analysts are gauging this scenario for less than previously expected Fed rate hike. Certain market predictions point to a no hike situation from the current Fed funds rate of 4.50 to 4.75%. The CME FedWatch Tool is currently showing a target rate probability of 61% for no hike.
More Bitcoin Price Rise Ahead?
In this context, a collapse in the banking sector is said to be increasing chances of a dovish Fed statement when the Federal Open Market Committee (FOMC) meets between 21 and 22 March, 2023. Shares of Switzerland based Credit Suisse Group AG are most affected with a drop of 24% while US bank First Republican Bank shares are down by 21%. With a widespread collapse in bank shares, Alex Kruger, a popular trader, thinks there could be higher odds of a dovish Fed in a week.
Another trader, Michaël van de Poppe, said the latest release of Producer Price Index (PPI) could cause a Fed pivot from the spree of raising interest rates.
PPI comes in at 4.6%, while 5.4% was expected.
Massive miss, resulting into inflation coming down.
Powell to pivot? Atleast 25bps seems very likely (or no hikes with the banking issues).
— Michaël van de Poppe (@CryptoMichNL) March 15, 2023
Mike Novogratz, a Bitcoin supporter and Galaxy Digital CEO also said such a move is on the way. Meanwhile, Bitcoin price saw some correction on Wednesday after BTC breached the $26,000 mark on Tuesday. Whether a dovish comment from Jerome Powell next week could spur a crypto price rise in coming months remains to be seen, but the chances appear to be justifying than not.
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The post Why Bitcoin Price May Soar In Coming Months? appeared first on CoinGape.
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