How Bitcoin Responded To The Fed's Interest Rate Decision
The cryptocurrency market historically reacts to macroeconomic changes. On September 20, the Federal Reserve published a report on interest rates, and here's how the major cryptocurrency reacted.
Ahead of the FOMC decision, the cryptocurrency market was in an upbeat mood. Bitcoin saw growth and held above $27,000. After the publication of the decision, the asset saw volatility as the Fed decided to keep rates unchanged in the range of 5.25% to 5.5%.
The Fed's decision was a long-awaited event and matched market expectations. Fed officials forecast another rate hike before the end of this year. Notably, the Fed abandoned its target threshold of 4.6% in favor of 5.1% as the economy failed to meet expectations of previous forecasts.
Immediately after the publication of the FOMC report, Fed Chairman Jerome Powell spoke at a press conference. In the statement, the Chairman stressed that the Fed has come a long way, but the consequences are yet to be felt, i.e. the effect of policy tightening has not yet been fully manifested. The FOMC still plans to bring inflation to 2%.
Initially, Bitcoin reacted positively to the FOMC decision, fixing the mark at $27,230.
Source & Copyright TradingView
However, after Powell's speech, the asset began to see volatility. The price of Bitcoin remains stable and consolidates in the area between $27,230 and $27,000. At the time of writing this article, the asset is trading at $27,013.
Source & Copyright TradingView
Market experts are predicting a quick reversal of the asset. Michael Van de Poppe said on X that Bitcoin will see growth from now on, as he is confident the Fed will not raise rates at the next meetings.
Breaking news:
— Michaël van de Poppe (@CryptoMichNL) September 20, 2023
No rate hike from the FED.
My best guess: we're done with the hiking policy. #Bitcoin is likely to start trending up from here (yes, a fakeout usually happens at the news).
