The two-day meeting of the Federal Open Market Committee ends on Wednesday.
The decision is likely to have an impact on Litecoin and other crypto prices.
Economists expect a more balanced Fed as it battles inflation and financial stability.
Litecoin Prices were volatile on Wednesday as investors awaited the upcoming interest rate decision by the Federal Reserve. LTC was trading at $80, where it has been for the past few days. Other cryptocurrencies are also wavering, with bitcoin trading at $28,255 and Ethereum stuck at $1,800. XRP and ADA are the two best performing large-cap coins.
Fed decision ahead
The main catalyst for the price of Litecoin will be the upcoming interest rate decision by the Fed. Economists polled by Reuters expect the Fed to maintain a relatively balanced tone as it tackles some of the economy’s top challenges.
The biggest challenge facing the Fed is the stability of the financial system following the collapse of several banks, including Credit Suisse and Silicon Valley Bank. And now, many researchers believe that about 190 banks may have failed because of their large unrealized losses.
A lack of confidence in the financial market can lead to chaos as people rush to withdraw their money. This will put the American economy in danger.
Another big risk is that US inflation looks sticky. Data published last week showed that the US consumer price index (CPI) stood at 6% in February, well above the Fed’s target of 2%. In such a situation, the bank will need to show its commitment to fight inflation in the country. As such, the most balanced course for the bank would be to hike by 25 basis points. In a note, ING analysts wrote,
“It’s a close call, but we expect a 25 bp hike by the Fed today. Ultimately, Powell’s primary goal is to restore investor confidence and the hold may indicate a lack of confidence in the financial system.” may also revise slightly higher, and the dollar may recover slightly.”
An hawkish tone by the Fed could put a dent in the recent rally in the cryptocurrency. Most coins have rallied by double digits over the past few days as investors priced in a more lenient tone by the bank.
Litecoin Price Prediction
The four-hour chart shows that the price of LTC has moved sideways over the past few days. Over this period, it has formed a symmetrical triangle pattern shown in red. The coin has moved slightly below the 50-period Exponential Moving Average (EMA).
Litecoin is also below the important resistance level of $88.36, which was the lowest point since February 13. MACD has moved slightly below the neutral point. Therefore, there is a possibility that there will be a bearish breakdown in Litecoin price after the Fed decision. If this happens, the next reference level to watch would be $70.
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