Bitcoin price hits $20,800 after 75 bps Fed rate hike

Bitcoin price hits $20,800 after 75 bps Fed rate hike

Bitcoin (BTC) experienced immediate volatility on November 2, when the US Federal Reserve announced its fourth straight interest rate hike of 0.75%.

1-hour candlestick chart of the BTC/USD pair (Bitstamp). Source: Trade View

The Fed indicates that more attention is to come

Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair first fell to $20,200 before later rebounding to $20,800.

The Fed confirmed the 0.75% hike, which represents the tightest hike schedule in forty years, in a statement shared on behalf of the Federal Open Market Committee.

“The Committee wants to achieve maximum employment and inflation at a rate of 2 percent in the long term. To support these objectives, the Committee decided to raise the target range for the federal funds rate from 3-3/4 to 4 percent. ,” the Fed said adding:

“The Committee expects that continued increases in the target range will be appropriate to achieve a monetary policy stance that is firm enough to reduce inflation to 2% over time. »

Analysts had long predicted increased volatility as a result of the rate decision. As of this writing, Fed Chairman Jerome Powell has yet to comment on the matter, which markets will be watching closely for guidance on the trajectory.

“Be careful, volatility will remain high for a while. Expect false exits to occur before the actual movement occurs! Michaël Van de Poppe, founder of the trading company Eight, said declared to his Twitter followers.

However, the Fed’s move was widely expected, according to the CME Group’s FedWatch tool, with Cointelegraph reporting a theory that sticking to the script would make cryptocurrencies even more likely to rise.

Target feed rate probability chart. Source: CME Group

How long will the increases last?

If Powell hints at a possible slowdown in increases or a change in policy, however, the situation could change dramatically.

Also Read: New Bitcoin Barometer System Says $20,000 BTC Is “Very Cheap” Now

“The market rally was almost 3% off the lows and the expected 75 bps. Now it’s about the press conference. “, yes abstract the popular CryptoISO market analysis account, adding:

“We knew the Fed had announced a possible slowdown or pause. This is not a pivot but a re-evaluation as the data comes out to see how it flows. 75 bps won’t work every time.”

Federal funds rate chart. Source: St. Louis Fed

The statement confirmed that Fed officials voted unanimously for 0.75%.

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