Bitcoin (BTC) spiked above $22,000 on July 27 after the US Federal Reserve enacted another major interest rate hike.
The Fed: It is “appropriate” to continue raising rates after July
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair reacted positively to the confirmation that the Federal Open Markets Committee (FOMC) had unanimously voted to hike the Fed’s benchmark interest rate by 75 basis points.
“The Committee tries to maximize employment and inflation at the long-term rate of 2%,” a press release states.
“In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that continued increases in the target range will be appropriate.”
Markets were already expecting 75 basis points to be the Fed’s next move. However, commentators have increasingly considered the implications of the central bank’s balancing act between controlling inflation and preventing recession in the future. future.
“Watch the Fed abandon forward guidance and rate commitments and embrace data dependency. This hike cycle ends tomorrow at 2pm. Buy bonds.” declared a day earlier, David Rosenberg, founder and president of Rosenberg Research & Associates.
Meanwhile, Wall Street macro strategist David Hunter forecast continued easing for risk assets. More pertinent was the bet that the recent lows would not be repeated, a potential boon for Bitcoin bulls given the cryptocurrency’s current correlation with stock markets.
“Regardless of what the Federal Reserve decides today (75 or 100 bps), the market is poised to rally to 4150-4200 S&P and then perhaps a short sharp pullback to 3800 before for a much larger and more sustainable rise to 6,000,” he told his Twitter followers.
“The lows are already set. The market is not likely to go back to the June lows.”
At press time, volatility was flooding the spot markets as the BTC/USD pair hovered around $22,000. Fed Chairman Jerome Powell was due to start a press conference shortly, and his language could add more headwinds or headwinds to the market’s trajectory.
In addition, the Committee will continue to reduce its holdings of Treasury and agency debt and mortgage-backed securities, as outlined in the Plans to Reduce the Size of the Federal Reserve Balance Sheet that were released in May. release.
Traders Bet on a Bitcoin Price Rebound
Analyzing the market setup, meanwhile, the bullish consensus among traders was palpable.
Analyst Dylan LeClair noted the buildup of long positions on derivatives exchange FTX in the hours leading up to the decision.
some big $BTC bulls on FTX going into FOMC pic.twitter.com/CWAE0BxGKZ
— Dylan LeClair (@DylanLeClair_) July 27, 2022
As we told you before, institutional sentiment improved during the second half of July, according to a study by the analysis company; ArcaneResearch.
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