FED Officials Considering One More Interest Rate Hike This Year: How Will Bitcoin Be Affected?

• The Federal Open Market Committee (FOMC) held a meeting to review inflation figures due to higher-than-expected U.S. PPI data and a warning signal for risky assets.
• On Thursday, the U.S. Department of Labor will release more data on the Consumer Price Index (CPI), which is expected to provide further clarity on the Fed’s future actions.
• In the past, when Bitcoin’s open interest exceeded $7 billion, it often indicated a degree of bullishness among investors. Currently, the open interest level is at $6.19 billion.

FED officials are considering another interest rate increase, according to the published minutes: What impact will this move have on Bitcoin and other assets?

FED Officials May Make One More Hike This Year

On Wednesday, October 11, the Federal Open Market Committee (FOMC) held a meeting to review inflation figures due to higher-than-expected U.S. PPI data and a warning signal for risky assets. Bitcoin and the broader crypto market faced additional selling pressure on Wednesday.

Reports suggest that FED officials are considering one more interest rate hike before the end of the year. Despite some dissenting views, all members unanimously agreed that maintaining elevated interest rates was a critical requirement for inflation to return to the desired annual rate.

The summary of the September policy meeting states: “Most participants judged that it would likely be appropriate to increase the target range for the federal funds rate in the coming months, some thought that it might be necessary to increase the policy rate by more than this.”

Further monetary tightening decisions could exert pressure on both stock markets and the crypto market. On Thursday, the U.S. Department of Labor will release more data on the Consumer Price Index (CPI), which is expected to provide further clarity on the Fed’s future actions.

Attention on Bitcoin Futures Open Interest

The on-chain analytics platform Santiment suggests that the increased number of Bitcoin futures and options is a factor contributing to the relatively lackluster performance of the cryptocurrency market in October. Historically, when Bitcoin’s open interest exceeds $7 billion, it often indicates a degree of bullishness among investors. The current open interest level stands at $6.19 billion.

Crypto analyst known as Altcoin Sherpa notes that Bitcoin’s current state resembles a period characterized by significant volatility with occasional price increases occurring both above and below the 200-day EMA. Altcoin Sherpa suggests that exciting times may come around in 2024-2025 and advises patience until then. Eyes will be on upcoming macro data later in the week, which could provide better clarity for the future.