Bitcoin and the FOMC- Bitcoin Hits $105,000 Following Fed’s Rate Decision: Can the Rally Continue?
Bitcoin and the FOMC– Bitcoin (BTC) saw a significant price surge following the Federal Reserve’s decision to leave interest rates unchanged within the 4.25% to 4.5% range. The move comes after the Fed’s acknowledgment that inflation remains “somewhat elevated,” yet they opted for a wait-and-see approach on monetary policy, keeping all options open for the short term.
Initial Reaction to FOMC Announcement
At first, Bitcoin’s price mirrored the initial reaction of traditional markets, declining alongside the S&P 500, DOW, and QQQ. However, the cryptocurrency quickly reversed course, hitting an intra-day high around $104,782. Despite this upward movement, charts suggest that the momentum may not sustain, with many analysts forecasting a potential pullback.
Futures Market Activity Driving Bitcoin Price
According to data from Velo.data, the surge in Bitcoin’s price was largely driven by activity in the futures market. An uptick in Bitcoin’s funding rate led to the liquidation of short positions, amounting to $15 million in the past hour alone. This liquidation sparked the short squeeze, contributing to the upward price movement.
What’s Needed for Sustained Price Growth?
Although Bitcoin has entered the $104,000–$106,000 resistance zone, the question remains whether the rally will last. Analysts are looking for a sustained uptick in spot buying and a return of the Coinbase premium to gauge whether Bitcoin can break through this resistance. Ideally, a surge in margin longs and rising volumes in the spot markets would be necessary for a sustained price rally above the $105,000 mark.
Fed Chair Powell’s Neutral Stance on Economy
As for Jerome Powell’s post-FOMC remarks, he kept his tone neutral, suggesting that inflation remains a concern, but the Fed is in no rush to make further moves. Economist Alex Krüger called the press conference “good,” pointing out Powell’s balanced stance on both monetary policy and the broader economy. However, others, like HUF, found Powell’s comments to be a “nothing burger,” noting that his diplomatic approach did not significantly lean in favor of either the bulls or bears.
In conclusion, while Bitcoin’s price has spiked in the short term, market participants are cautious, awaiting clearer signs of sustained demand in spot markets and confirmation of bullish momentum.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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