Lately, it’s become a phenomenon for the crypto-currency market to only adjust its momentum after digesting the outcome of the Fed rate hike announcement and the subsequent speech by central bank chairman Jerome Powell.
Therefore, it is advisable to wait and watch for a while after Powell’s speech is over before taking a position on bitcoin. In this way, the market stabilizes at that time and the uncertainty is already taken into account.
Markets, whether in crypto or equities, could perhaps react most to how the Fed goes about its predictions on the future of interest rates. Traders would be watching closely for any hint of the possibility of a “Fed Pivot” by 2023. The Fed Committee’s outlook on unemployment and inflation numbers will also be key.
Powell’s Speech: Bitcoin (BTC) Reaction
Whether crypto-currency prices rise or fall will depend solely on Powell’s speech and his plan to control inflation in the coming months. This is given the market consensus that the Fed will raise rates by 0.25%, which will mark a slowdown after a 75bp rate hike streak in 2022. A 25 bp rate hike would bring the interest rate range to 4.50% to 4.75%. The CME Fed Monitoring Tool currently projects 99.3% confidence in a 25 bp hike.
Meanwhile, the price of bitcoin is showing a lot of volatility although it is trading in a small range around the $23,000 mark. At the time of writing, the price of BTC stands at $23,006, down 0.77 percent over the past 24 hours, according to price tracker CoinGape.