Bitcoin prices have consistently shown notable volatility around Federal Open Market Committee (FOMC) meetings.
Historical data from recent meetings shows that Bitcoin tends to fall in value before the FOMC's interest rate decisions and then rise significantly after the announcement.
Bitcoin falls before FOMC, rally after Fed decision
The Federal Open Market Committee is the branch of the Federal Reserve System that oversees open market operations in the United States. The FOMC meeting is an important event where key decisions are made about the interest rates at which banks lend to each other and monetary policy.
These meetings are typically held eight times a year and discuss in depth the U.S. economy and the various factors affecting it.
On December 13, 2023, the FOMC decided to keep interest rates unchanged between 5.25% and 5.50%. Ahead of this meeting, Bitcoin price fell 8.76%. However, since the announcement, Bitcoin has surged 22.07%. This pattern was repeated by the FOMC, which again froze interest rates on January 31, 2024, with the value of Bitcoin falling 4.55% before the meeting and rising 26.34% after the meeting.
Read more: Bitcoin (BTC) Price Prediction 2024/2025/2030
This trend continued on March 20, 2024, with Bitcoin falling 11.82% before the FOMC meeting and rising 18.09% after the decision. Similarly, on May 1, 2024, Bitcoin fell 12.69% before the rate freeze and rose 15.95% after the announcement.
Ahead of the upcoming FOMC meeting on June 12, 2024 , Bitcoin has already fallen 8.25%. U.S. Senators Elizabeth Warren, Jackie Rosen, and John Hickenlooper urged the Federal Reserve to cut interest rates, citing the negative effects of current monetary policy on inflation and the economy.
“The Fed's monetary policy is not helping to lower inflation. In fact, rising home and auto insurance premiums, two major drivers of inflation, threaten the health of the economy and risk a recession that could put thousands of American workers out of work,” the senators wrote in a letter to Federal Reserve Chairman Jerome Powell. It was revealed.
Read more: How to Use Cryptocurrency to Protect Yourself from Inflation
Considering historical data, market experts predict that Bitcoin price is likely to rebound following the announcement. Consistent patterns suggest that regardless of the Fed's decision, Bitcoin often recovers and even thrives after the initial uncertainty surrounding the FOMC meeting dissipates.
Understanding these trends can help investors make informed decisions by balancing the risks and opportunities posed by Bitcoin's inherent volatility around major economic announcements.
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