- US Fed left interest rate unchanged again, citing “lack of further progress” on 2% inflation target.
BTC remains under pressure despite a modest flip after the Fed meeting.
As an experienced financial analyst, I believe that the US Federal Reserve’s decision to leave interest rates unchanged once again is a clear signal that they are committed to maintaining their “higher for longer” stance. This means that investors should brace themselves for continued rate hikes in the near future, which could put further downward pressure on Bitcoin (BTC) and other cryptocurrencies.
The decline in Bitcoin‘s price came to a halt following the anticipated decision by the Federal Reserve to keep interest rates constant on May 1st.
As an analyst, I would put it this way: At our latest meeting, the Federal Reserve decided to maintain the interest rate at a range of 5.25% to 5.50%, marking the sixth consecutive time we’ve held it steady. However, it is important to note that the Fed does not foresee any rate cuts until there is stronger evidence that inflation will trend downward and approach the desired level of around 2%.
Part of the Fed’s policy statement read,
“Over the past few months, the Committee has not made significant headway in reaching its 2% inflation target.”
During a subsequent press conference, I was queried about the possibility of implementing three interest rate reductions later in the year. My response was:
In the initial three-month period, we didn’t witness any advancement. It seems, therefore, that achieving that degree of certainty will require more time.
In a nutshell, “the higher rates for longer” stance seems officially back.
Bitcoin saw a modest flip as memecoins led a short recovery
Approximately an hour following the Federal Reserve’s interest rate announcement, memecoins such as Bonk (BONK), Floki Inu (FLOKI), and Dogewhizz (WIF) experienced a minor rebound, registering gains of around 6%.
BTC and Ethereum [ETH] recorded a modest flip within the same period.
Over the past two days, Bitcoin (BTC) has experienced a significant decline, dropping more than 12% from its peak of $64,700 to a low of $56,500. This latest slide extends BTC’s losses in April into May and emphasizes the challenging quarter we are currently in.
Following the Fed’s announcement, Bitcoin regained the $58,000 mark but then dipped once more within a few minutes, signaling that it continued to face significant selling pressure.
ETH also saw a modest uptick but faced rejection at the $3000 level at the time of writing.
It’s intriguing to consider how Bitcoin (BTC) may respond to the Federal Reserve’s “higher for longer” interest rate policy and the ongoing outflows from US Bitcoin Exchange-Traded Funds (ETFs), as it attempts to retake the support level near $60,800.
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2024-05-02 08:07