Bitcoin fall, recovers as the Fed unleashes the biggest interest rate buck in 28 years
The US Federal Reserve raised interest rates by 0.75 percent on Thursday, the largest single rise in three decades. However, the central bank has indicated that further increases will come later this year.
Bitcoin fluctuated significantly after the Fed’s announcement of an interest rate hike, which was a desperate attempt to counter rising inflation. The action represents another record high policy rate increase, and sends the price of BTC in a whirl.
Bitcoin traded at $ 22,613 at the time of writing, down 25 percent in the past week, according to data from Coingecko gathered on Thursday. After reaching $ 21,222 approx. 17:55 UTC, BTC fell as low as $ 20,069.
Bitcoin volatility after Fed tour
According to analysts, Bitcoin tends to face volatility when the central bank announces an interest rate decision. However, the actual effects of the disclosure are usually not noticed until a few days later.
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Powell says the labor market is tremendously tight, and inflation is far too high. Image: Justin Lane/EPA.
Cryptocurrency markets are still strongly influenced by macro sentiment, according to Noelle Acheson, head of insight at Genesis Trading, as quoted by Yahoo Finance.
Acheson stated that the relief rally is quite welcome in light of recent events in the cryptocurrency markets.
The Fed announced an interest rate increase of 0.5% last month, the highest increase in 22 years. After the revelation, bitcoin had a temporary increase, but in the days that followed it fell in line with the stock market.
This hike, on the other hand, can be the exact opposite. In light of last Friday’s 8.6% CPI figure, some believe that the markets have already included an interest rate increase.
Crypto total market cap at $937 billion on the daily chart | Source: TradingView.com
Powell says inflation is too high
Bitcoin and the cryptocurrency market as a whole have taken a huge hit in recent weeks as investors have sold risky assets.
Jerome Powell, chairman of the Federal Reserve, said at a news conference Wednesday after the decision was announced that “the current picture is clear. The labor market is extremely tight, and inflation is far too high. “
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As the gloomy forecasts of a probable interest rate increase of 100 basis points were not realized and the market initially received what was expected from the meeting of the Federal Open Market Committee (FOMC) on 15 June, the altcoin market also experienced a modest price increase.
The digital asset market has been strongly linked to the stock markets. Today, the Bitcoin stock market followed, as it has for most of this year: the S & P500 and Dow Jones Industrial Average both dived on the news before recovering.
Featured image from Cryptor Trust, chart from TradingView.com
