Affected by the decisions of the seven major central banks and geopolitical conflicts, Bitcoin may face a critical directional decision next week

According to CoinDesk, the global financial markets will experience a busy week of central bank rate decisions. Including the Federal Reserve, seven major central banks will announce their interest rate decisions from March 17 to 19. Coupled with the surge in oil prices triggered by the Middle East war, concerns about global inflation are reignited.

The busy central bank decision schedule next week is as follows:

First, on March 17, the Reserve Bank of Australia (RBA) will announce its interest rate decision; then on March 18, the Bank of Canada (BOC) and the Federal Reserve (Fed) will release theirs; finally, on March 19, the Bank of Japan (BOJ), the Swiss National Bank (SNB), and the European Central Bank (ECB) will announce their interest rate decisions.

Previously, the market widely expected that major central banks like the Federal Reserve would gradually cut rates or maintain an easing stance. Additionally, the rise of AI technology in the U.S. was seen as a potential deflationary force. This expectation once provided strong support for risk assets like Bitcoin.

However, since the U.S. launched military strikes against Iran on February 28, Middle Eastern energy transportation has been disrupted, and rising oil prices have reignited inflation concerns in the industry, prompting traders to reassess the upcoming global central bank rate decision expectations.

Currently, policymakers are caught in a dilemma. Based on their mistaken judgments in 2021-2022 that led to a brief inflationary lesson, they may now lean toward swift action to curb rising prices. Therefore, if central banks signal a hawkish stance next week, risk assets like Bitcoin could experience significant downward volatility.

However, economists point out that in the face of oil price shocks, the Federal Reserve’s typical approach is to observe inflation levels first and then assess losses, because oil plays a crucial role in the modern economy.

Nevertheless, although oil shocks can push up inflation while constraining economic growth, such shocks are temporary. The Fed is also reluctant to hastily adjust interest rates due to misjudgments of the situation, which could lead to a forced reversal after a few weeks.

According to historical patterns, only the interest rate decisions of the Federal Reserve and the Bank of Japan can have a substantial impact on Bitcoin prices.

But with the upcoming global central bank statements, coupled with soaring oil prices and the persistent shadow of inflation, Bitcoin may face a real stress test next week.

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