Bitcoin Jumps Above $29,000 After Fed Rate Hike Decoupling From Equities
In hours following the Fed’s announcement of interest rate hike by another 25 basis points, Bitcoin and the broader crypto market registered an instant jump.
As of press time, Bitcoin (BTC) is trading 2.14% up at a price of $29,158 and a market cap of $564 billion. It seems that investors have decided to look past the FOMC meeting and the Fed decision of rate hike.
With yesterday’s another 25 basis points rate hike, the Fed took the funds rate to more than 5% for the first tie since 2007. Fed’s recent fund rate hikes have induced fear among the global market raising concerns over an impending recession and the fragile economic environment.
However, Fed Chairman Jerome Powell hinted that this could be the last rate hike of this monetary tightening cycle. However, with the strong labor market and stick inflation, the Fed is likely to continue holding the interest rates high. However, yesterday’s rate hike was quite on the expected lines as crypto investors decided to look past it.
Yesterday’s Bitcoin price jump comes along with the Bitcoin address activity jumping to a two-month high. The address activity also comes with traders taking the opportunity to leverage the price fall.
Also, soon after the Fed announcement, all three major US indices headed downwards ending the trading session in the red. However, Bitcoin and the broader crypto market jumped resulting into a strong decoupling from the equity market.
Along with Bitcoin, other large market cap altcoins have also registered a strong bounce. Ethereum (ETH) is up by more than 2.57% and is currently trading above the $1,900 levels.
Along with Ethereum, some of the top falcons such as Cardano (ADA), Solana (SOL), Polygon (MATIC), and XRP have all gained anywhere between 1.5-4%.
Bitcoin and the broader cryptocurrency market have shown strong resilience in the wake of the emerging banking crisis in the United States. Earlier in March 2023, Bitcoin managed to deliver a strong performance during the fall of Silicon Valley Bank and Signature Bank. Last Sunday, Bitcoin showed a similar move upside amid the fall of yet another bank - the First Republic Bank.
This shows that Bitcoin is emerging as a true hedge to the traditional banking system. However, Bitcoin has faced multiple rejections at the $30,000 levels over the last few weeks. Thus, it needs to break these levels to confirm a sustained uptrend.