$BTC is heading into one of the biggest macro events of September.
The Fed announces its rate decision today, September 16, and markets are heavily positioned for a 25-basis-point hike.
Current market pricing puts the probability of a hike at roughly 93%, which would take the Fed's target range from 3.50%–3.75% to 3.75%–4.00%.
It would also be the Fed's first rate increase since July 2023.
But the interesting part is the bigger Bitcoin catalyst may not be the rate decision itself.
It could be what the Fed says next.
Scenario 1: The Fed unexpectedly.
At first glance, a surprise hold could look bullish for Bitcoin.
Markets would likely interpret it as a less-aggressive policy move, potentially pushing Treasury yields and the dollar lower and giving risk assets some relief.
But Inflation is still elevated.
August CPI came in at 3.4% YOY, with monthly CPI rising 0.4%. Energy prices have also surged, with Brent crude recently trading around $107 a barrel.
If investors interpret a surprise hold as the Fed becoming too tolerant of inflation, longer-term Treasury yields could actually rise.
That would create a strange situation in which Bitcoin rallies first, bond yields jump, and risk assets become volatile.
So a surprise hold wouldn't automatically mean crypto pumps.
Scenario 2: The Fed hikes 25 bps.
This is the outcome markets are already expecting.
And that's important because if the hike is fully priced in, the headline decision itself may not cause a major Bitcoin sell-off.
Instead, traders will focus on:
1. The Fed's economic projections
2. How many additional hikes are signaled
3. Warsh's comments during the press conference
4. Treasury yields
5. The U.S. dollar
A 25-bps hike accompanied by relatively restrained guidance could even produce a buy the fact reaction if traders had positioned too defensively ahead of the meeting.
#BTC Price Analysis# #Macro Insights#
The Fed announces its rate decision today, September 16, and markets are heavily positioned for a 25-basis-point hike.
Current market pricing puts the probability of a hike at roughly 93%, which would take the Fed's target range from 3.50%–3.75% to 3.75%–4.00%.
It would also be the Fed's first rate increase since July 2023.
But the interesting part is the bigger Bitcoin catalyst may not be the rate decision itself.
It could be what the Fed says next.
Scenario 1: The Fed unexpectedly.
At first glance, a surprise hold could look bullish for Bitcoin.
Markets would likely interpret it as a less-aggressive policy move, potentially pushing Treasury yields and the dollar lower and giving risk assets some relief.
But Inflation is still elevated.
August CPI came in at 3.4% YOY, with monthly CPI rising 0.4%. Energy prices have also surged, with Brent crude recently trading around $107 a barrel.
If investors interpret a surprise hold as the Fed becoming too tolerant of inflation, longer-term Treasury yields could actually rise.
That would create a strange situation in which Bitcoin rallies first, bond yields jump, and risk assets become volatile.
So a surprise hold wouldn't automatically mean crypto pumps.
Scenario 2: The Fed hikes 25 bps.
This is the outcome markets are already expecting.
And that's important because if the hike is fully priced in, the headline decision itself may not cause a major Bitcoin sell-off.
Instead, traders will focus on:
1. The Fed's economic projections
2. How many additional hikes are signaled
3. Warsh's comments during the press conference
4. Treasury yields
5. The U.S. dollar
A 25-bps hike accompanied by relatively restrained guidance could even produce a buy the fact reaction if traders had positioned too defensively ahead of the meeting.
#BTC Price Analysis# #Macro Insights#
