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Bitcoin
and other cryptocurrencies were largely unchanged on Wednesday, after the Federal Reserve made an expected quarter-point increase in interest rates while signaling a possible pause at future meetings.
The price of Bitcoin has fallen about 0.9% in the last 24 hours to $28,400. Most of the drop occurred after the Fed’s 2 p.m. EDT announcement, with prices falling about 0.6% after the release of the policy statement.
Up some 70% so far this year, the largest crypto climbed above $30,000 last month for the first time since June 2022 but has struggled to consolidate above that key mark in the weeks since. It has, however, recently reclaimed other important technical levels.
“Bitcoin has steadily moved back above its 50-day moving average, proving that the break below was false,” said Alex Kuptsikevich, an analyst at broker FxPro, before the rate-hike announcement.
A dramatic rise in interest rates over the past year—a bid from the central bank to control inflation—has slammed cryptos and stocks alike. But Bitcoin’s resurgence in 2023 has come amid expectations that the Fed will soon become more accommodative. That narrative remains fragile. The Fed raised rates by a quarter-point on Wednesday, as expected, and indicated that it might be done with its historically rapid series of rate increases, but gave no indication that it might soon reverse course and enact cuts in the months to come.
A hawkish tone from Fed Chairman Jerome Powell could shake the recent rebound in cryptos.
“A consolidation above $29,300 (the start of the selloff) or a break below $28,200 (the 50-day moving average) could signal that the market has decided on a direction for the next few days or weeks,” said FxPro’s Kuptsikevich.
Cryptos beyond Bitcoin reacted more positively to the rate announcement. Ether—the second-largest digital asset—gained 1% in the last 24 hours to $1,890. Smaller tokens were more mixed, with Cardano losing 1.4% and Polygon rising 2.4%. Memecoins Dogecoin and Shiba Inu both fell less than 1%.
Write to Jack Denton at jack.denton@barrons.com
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