Bitcoin recorded a slip and is trying to establish a support level as the U.S Federal Reserve raised the interest rate by 0.75% for the fourth consecutive time. The popular cryptocurrency dropped momentarily to $20,200 mark, rebounded to $20,800 then slipped again. At the time of writing this article, Bitcoin was trading at $20,362.
The Federal Open Market Committee (FOMC) wants to achieve maximum employment and inflation at the rate of two percent over the longer run. The Fed shared that the Committee decided to raise the target range for the federal funds rate to 3 – 3/4 to 4 percent in order to support the goals. The Committee feels that ongoing increases in the target range will be appropriate to attain a stance of monetary policy that is restrictive to return inflation to two percent over time.
For quite some time now, analysts have predicted volatility resulting from the Fed’s rate decision. Michael van de Poppe, the founder of Eight, urged his Twitter followers to be cautious. He said volatility will remain high during this event, fake-outs happen before the real move takes place.
CryptoISO, a popular market analysis account, stated that the market rallying ~13% off the lows was this expected 75 bps. It said the Fed had telegraphed an eventual slowdown, not a pivot but more of a reassessment as data comes out to see how it’s flowing through. The analyst said 75 bps cannot work all the time.
Glenn Williams, a crypto analyst, believes the crypto winter has given bullish investors the opportunity to accumulate at a favorable cost basis. He said larger crypto investors continue to explore this opportunity. Williams outlined that asset managers are picking the right price point to go long and seem to be ahead of the curve.