These two events determine whether Bitcoin and Litecoin break or make it
- CPI report and FOMC interest rate decision expected this week could cause BTC and LTC to either rally or crash.
- Analysts believe that a year-end rally for the market is more likely based on previous Fed comments.
While the cryptocurrency market has been trading in a consolidation trend, analysts are looking forward to two upcoming market events that could determine a price rise or a sharp fall, especially for Bitcoin (BTC) and Litecoin (LTC).
Popular cryptoanalyst Nicholas Merten pointed out these short-term events on which the fate of the market rests. In a analysis videohe told his more than 511,000 subscribers that the market is awaiting the Consumer Price Index (CPI) report and the last Federal Reserve’s Federal Open Market Committee (FOMC) meeting of the year.
The two events are specially planned this week. The CPI report will be out on December 13, while the FOMC meeting is scheduled for December 14-15. According to Merten, the outcome of the CPI report – whether or not there will be a larger increase in inflation than expected – will directly affect the Fed’s decision to raise interest rates or not at the FOMC meeting.
“If the Federal Reserve sees a big upset in the CPI to the downside, meaning that inflation is still incredibly high month-to-month and that the annual target that they aim to reach of 2% is still a long way off, they may well, makes another 75 basis point hike,” he said.
Are the events more likely to make or break BTC and LTC prices?
According to Mertens, it remains unclear what the resulting effect of the Fed’s efforts to prove that they are going to do what is necessary to bring the runaway inflation rate under control will be on the crypto market.
Mertens noted that even if the Fed swings and makes a 50 basis point rate hike, which is widely expected by market participants, it cannot save the BTC market from spiraling to new lows. The market will remain under pressure as a result of interest rate changes, he said, citing evidence from other bear markets where the Fed’s policy of cutting the funding rate by several points still saw stocks down.
In contrast, analysts at trading company QCP Capital have for crypto assets thought that BTC could see a year-end rally if CPI data prompts the Fed to announce a smaller-than-expected rate hike. The rally may even precede the Fed’s rate hike announcement as market participants may begin entering the market based on expectations that Jerome Powell will keep his word.
At press time, BTC was trading at around $16,990, down 0.88% in the last 24 hours. LTC changed hands at $74.85, down 3.29% on the daily chart.
