Bitcoin BTC
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Prices rebounded on Tuesday as analysts suggested the possibility of a U.S. interest rate freeze at the Federal Reserve’s next meeting in late January could support digital assets.
The price of the world’s largest cryptocurrency by market capitalization has risen more than 1.4% in the past 24 hours, rising to $43,071 at 11:34 a.m. ET, according to The Block’s pricing page.
Bitcoin price is up more than 1.4% in the last 24 hours. Image: Block.
Possibility of Fed interest rate freeze
In 15 days, the Federal Reserve is scheduled to meet to determine the direction of the central bank’s monetary policy. According to the CME FedWatch tool, there is a 97.4% chance that the Fed will remain in its current target range of 5.25% to 5.50%.
Bitfinex analysts said a rate freeze in January would “provide relief to the strained banking sector and tepid stock markets, along with a potential upside for Bitcoin.”
Analysts also pointed to a summary of economic outlook that predicted the central bank would cut policy rates by about 75 basis points throughout 2024.
“These potential cuts are viewed as measures to strengthen the economy, especially if inflation continues to be consistent with the Fed’s stability objectives. However, the timing and size of these rate cuts are critical. A premature or excessive cut could lead to a resurgence in inflation.” “A minimal cut could hinder economic growth,” Bitfinex analysts told The Block.
However, on-chain indicators indicate increased selling pressure on the digital asset, with Bitcoin exchange holdings steadily increasing since late December. According to data from CryptoQuant, the floating supply of Bitcoin on centralized exchanges increased from about 2,060,000 to about 2,101,400 last month, an increase of more than 2%.
Bitcoin exchange holdings have steadily increased since late December. Image: CryptoQuant.
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