Bitcoin (BTC) broke through the $22,000 mark on July 27 following a significant interest rate hike by the United States Federal Reserve.
Fed Signals Intent to Continue Hiking Rates
Data from Cointelegraph Markets Pro and TradingView indicated that BTC/USD responded positively to the news that the Federal Open Markets Committee (FOMC) unanimously decided to increase the Fed funds rate by 75 basis points.
The FOMC’s objective is to achieve maximum employment and maintain a 2% inflation rate in the long term, as mentioned in a press release.
“In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate.”
It was widely anticipated by the markets that a 75 basis point increase was on the horizon for the Fed. Analysts, however, were increasingly focused on how the central bank would navigate between controlling inflation and preventing a recession in the future.
David Rosenberg, founder and president of Rosenberg Research & Associates, predicted a shift towards data-driven decision-making by the Fed and recommended buying bonds in response to the rate hike.
Looking ahead, Wall Street macro strategist David Hunter predicted a positive outlook for risk assets, indicating that recent lows would likely not be revisited. This could be advantageous for Bitcoin investors, given the cryptocurrency’s current correlation with equity markets.
At the time of writing, Bitcoin’s price was hovering around $22,000, experiencing fluctuations in the market. Fed chair Jerome Powell was scheduled to hold a press conference, where his statements were expected to influence market trends.
Additionally, the press release mentioned that the Committee would continue to decrease its holdings of Treasury securities and agency debt and mortgage-backed securities, as outlined in plans issued in May.
Traders Optimistic About Bitcoin’s Potential
Traders were demonstrating a bullish sentiment ahead of the Fed’s decision, with analyst Dylan LeClair observing an increase in long positions on FTX derivatives exchanges.
Institutional sentiment towards Bitcoin had been improving in the latter half of July, according to research from analytics firm Arcane Research.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of Cointelegraph.com. All investment decisions involve risk, so it’s advisable to conduct thorough research before making any investment.
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