After Yesterday's Hawkish FED Minutes, Is the Bitcoin Rally Over or Continuing? Pay Close Attention to Tomorrow!

Bitcoin and cryptocurrency markets experienced slight losses following the release of the minutes from the Federal Open Market Committee meeting held by the FED on May 6-7 (FOMC).

The hawkish statements in the minutes have limited investors' appetite for short-term risk.

FED officials indicated that "difficult policy choices" may arise in connection with persistent inflation and the risks of an impending recession. The minutes stated, "Participants agreed that uncertainty regarding the economic outlook has increased further, and they decided that a cautious approach would be appropriate until the net economic effects of changes in government policies become clearer."

Despite this, BRN analysts stated that institutional demand continues to remain strong. While spot Bitcoin ETFs in the US have recorded net inflows for 10 consecutive days, BlackRock has made the largest contribution. BRN analyst Valentine Fournier noted that many companies have announced their plans to add BTC as a reserve asset to their portfolios.

"Bitcoin continues to benefit from its positioning as a hedge and long-term asset. Institutional adoption is strong, and more and more companies are building BTC reserves," said BRN analysts, noting that the rally could regain momentum with the end of profit-taking.

Another important development that investors are focusing on is the report of Personal Consumption Expenditures (PCE), which is the inflation indicator that the FED cares about the most. The data to be announced on Friday is critically important for the markets.

According to Dr. Kirill Kretov, a senior automation expert at CoinPanel, data that falls short of expectations could reduce the FED's inflation concerns and increase the likelihood of interest rate cuts. However, he noted that if the data comes in higher, it could trigger a flight to safety mode. "The liquidity structure in the crypto markets is still fragile. Therefore, even if the data exceeds or falls short of expectations by only 0.1%, we could see excessive price movements," he said.

*This is not investment advice.

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