Bitcoin price hits $20.8k as volatility follows Fed’s 75-point rate hike
Bitcoin (BTC) saw immediate volatility on November 2 when the US Federal Reserve enacted a fourth consecutive 0.75% interest rate hike.
The Fed hints that more hikes are coming
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD initially fell to $20,200 before currently retreating to $20,800.
The Fed confirmed the 0.75% hike, marking its most intensive rate hike in forty years, in a statement shared on behalf of the Federal Open Market Committee.
“The committee seeks to achieve maximum employment and inflation of 2 per cent in the longer term. In support of these objectives, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent,” the Fed stated, adding:
“The committee expects that ongoing increases in the target range will be appropriate to achieve a monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.”
Analysts had long predicted increased volatility as a result of the interest rate decision. At the time of writing, Fed Chair Jerome Powell was still set to comment on the move, which markets would be keenly looking for clues.
“Be careful, volatility will remain high during this event, fake outs happen before the real move takes place!” Michaël van de Poppe, founder of trading company Eight, told Twitter followers.
The Fed’s decision had nevertheless been widely expected, according to CME Group’s FedWatch Tool, with Cointelegraph reporting a theory that sticking to script would still offer crypto a chance for further upside.
How long can the tours continue?
Should Powell hint at possible slower increases or a pivot in policy, however, the situation could turn dramatically.
Related: New Bitcoin Yardstick Calculation Says $20K BTC Now ‘Extraordinarily Cheap’
“The market rallying ~13% off the lows was this expected 75bps. It’s all about the presser now,” popular market analysis account CryptoISO in summaryadd:
“We knew the Fed had telegraphed an eventual slowdown/pause. Not a pivot, but more of a reassessment as data comes out to see how it flows through. 75 bps each time won’t work.”
The statement confirmed that Fed officials had voted unanimously for 0.75%.
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