Global financial markets were focused entirely on the US Federal Reserve and on June 15 the decision to raise interest rates by 75 basis points, the biggest increase in 28 years, came as the central bank lowered inflation rates to the highest in four decades. fights.
Bitcoin (BTC) and the broader cryptocurrency markets came under pressure in the early trading hours of June 15 as rumors of a possible collapse of Three Arrows Capital (3AC) spread across the ecosystem, data from Cointelegraph Markets Pro and TradingView shows , which is still grappling with the ongoing Celsius debacle.
Following the announcement by Federal Reserve Chairman Jerome Powell that there would be an increase of 75 basis points, the price of bitcoin briefly climbed to $22,520 and then back to $21,500.
Similarly, the altcoin market saw a brief price pump as dire predictions of a potential 100 basis point increase failed to materialize and the market was largely expected from the June 15 Federal Open Market Committee (FOMC) meeting.
Traditional markets responded positively to the announcement with the S&P 500, Dow and Nasdaq trading in the green for the day, but traders would be wise to watch how markets behave at the daily close and tomorrow’s opening bell.
related: Bitcoin Jumps 8% Below BTC Price Amid Warnings That ‘Shouldn’t Happen’
Analysts Digest the Rate Hike and Its Possible Impact on Crypto Prices
Shortly after Powell announced a 75 basis point hike, projections for the Fed to start cutting rates began with the key agreeing that they would start in 2024.
BREAKING: Biggest rate hike since 1994 from the Fed.
However, there are expectations from FED policymakers that they will start cutting rates in 2024.— Michael van de Pope (@CryptoMichNL) 15 June 2022
The rise in interest rates is mainly driven by increased inflation, which according to the latest Consumer Price Index (CPI) print came in at 8.6% year-on-year, higher than analysts had predicted.
Some analysts have begun to speculate that the reason for the highest rate hike in 28 years is part of an effort by the Federal Reserve to try and get ahead of the curve and establish enough leg room to be able to prevent future hikes. If the economic situation is going from bad to worse.
It looks like they are doing what I thought they would do in January (even before Ukraine). Frontload hikes that give them cover to hit the pause button later, while things can still heat up a bit. I would expect to hear scathing rhetoric today (there will be a rise anyway).— The Long View (@HayekAndKeynes) 15 June 2022
Overall, the rate hike, which was largely expected, appears to have priced in the cryptocurrency market as prices remained relatively flat following the announcement and currently, more crypto-specific developments dominate the headlines in this area.
The total cryptocurrency market cap now stands at $931 billion and bitcoin has a dominance rate of 44.5%.
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