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.
Bitcoin price is down around 0.9% in the last 24 hours to $28,400. Most of the decline occurred after the Fed’s announcement at 2pm EST, with prices down about 0.6% after the policy statement was released.
The biggest cryptocurrency is up about 70% so far this year, surging more than $30,000 in the past month for the first time since June 2022, but has struggled to consolidate above that key mark in the weeks since. However, it has recently recovered other important technical levels.
“Bitcoin has steadily returned above the 50-day moving average, which proves that the break below was false,” Alex Kuptsikevich, an analyst with broker FxPro, said before the rate hike announcement.
The sharp rise in interest rates over the past year – an attempt by the central bank to control inflation – has led to criticism of cryptocurrencies and stocks alike. But the return of bitcoin in 2023 came amid expectations that the Federal Reserve would soon become more accommodating. This narrative is still fragile. The Fed raised interest rates by a quarter point on Wednesday, as expected, and indicated it might do so with a series of historically rapid rate hikes, but gave no indication it might soon reverse course and enact cuts in the coming months.
The hawkish tone from Federal Reserve Chairman Jerome Powell could shake up the recent rebound in cryptocurrencies.
Announcement – scroll to continue
FxPro’s Kuptsikevich said: “A consolidation above $29,300 (the start of a sell-off) or a break below $28,200 (50-day moving average) could indicate that the market has decided on a direction for the next few days or weeks.
Cryptocurrencies outside of Bitcoin reacted more positively to the price announcement. Ether – the second largest digital asset – gained 1% in the past 24 hours to reach $1,890. Small coins were more complicated, with Cardano losing 1.4% and Polygon up 2.4%. Memecoins Dogecoin and Shiba Inu both fell less than 1%.
Write to Jack Denton at email@example.com