The Federal Open Market Committee will conclude its two-day meeting on Wednesday.
This decision will likely have implications for Litecoin and other crypto prices.
Economists expect a more balanced Fed as it battles inflation and financial stability.
Litecoin price moved sideways on Wednesday as investors waited for the upcoming interest rate decision by the Federal Reserve. LTC was trading at $80, where it has been in 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 two of the best-performing big-cap coins.
Fed decision ahead
The main catalyst for Litecoin price will be the upcoming interest rate decision by the Fed. Economists polled by Reuters expect the Fed will maintain a relatively balanced tone as it combats some of the top challenges in the economy.
The biggest challenge the Fed is facing is the stability of the financial system following the collapse of several banks, including Credit Suisse and Silicon Valley Bank. And now, several researchers believe that about 190 banks could fail because of their large unrealized losses.
A lack of confidence in the financial market could lead to chaos as people rush to get their money out. That would put the American economy at risk.
The other big risk is that America’s inflation seems to be sticky. Data published last week showed that America’s consumer price index (CPI) remained at 6% in February, much higher than the Fed’s target of 2%. As such, the bank will need to show its commitment for fighting inflation in the country. As such, the most balanced way will be for the bank to hike by 25 basis points. In a note, analysts at ING wrote:
“It’s a close call, but we expect a 25bp hike by the Fed today. Ultimately, Powell’s primary goal is to restore investor confidence and a hold might signal a lack of trust in the financial system. The dot plots may also be revised slightly higher, and the dollar could recover a bit.”
A hawkish tone by the Fed could dent the recent rally in cryptocurrencies. Most coins have jumped by double digits in the past few days as investors price in a more dovish tone by the bank.
Litecoin price prediction
The four-hour chart shows that the LTC price has moved sideways in the past few days. In this period, it has formed a symmetrical triangle pattern that is shown in red. The coin has moved slightly below the 50-period exponential moving average (EMA).
Litecoin is also below the important resistance level at $88.36, the lowest point on February 13. The MACD has moved slightly below the neutral point. Therefore, there is a possibility that Litecoin’s price will have a bearish breakdown after the Fed decision. If this happens, the next reference level to watch will be at $70.
How to buy Litecoin
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.
Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.
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