Bitcoin resurfaced above $61k after Wednesday’s FOMC meeting. The price had already recovered from $58k to around $60k on Tuesday in anticipation of the first rate cut in over four years. The Fed decided to cut the policy rate by 50bp on Wednesday, which was believed to send an alarming message to the market that the Fed had kept the rate too high for too long. However, the updated Summary of Economic Projections (SEP) revealed that their forecast for GDP growth rate was little changed, showing confidence in the steady economic growth. Chair Powell further added that he does not see signs of recession and his confidence towards reducing inflation to the 2% target has grown even more in the press conference.
Bitcoin is not completely out of the woods as the Bank of Japan’s policy meeting starts today. The BOJ will likely keep the policy rate this time around but signs of additional rate hikes could boost JPY and may trigger yen carry trade to rewind, which could result in a sell off in the Japanese stock market and the risk-off sentiment could cascade into the crypto market. Still, bitcoin has some time until the BOJ makes the decision and could extend its gain during Thursday’s U.S. session. The next likely short-term target is around $65k.