Bitcoin [BTC] losing grip on $28k as interest rate hikes continue, unabated
- The FOMC raised interest rates by 0.25, which led to BTC’s price drop
- On-chain analysts and Bitcoin maximalists maintained a bullish stance
Bitcoins [BTC] the price fell below the threshold of $28,000 after the release of the US Federal Open Market Committee (FOMC) decision on interest rates. The FOMC is the nation’s Federal Reserve department responsible for evaluating price stability, economic conditions and setting monetary policy.
Read Bitcoins [BTC] Price prediction 2023-2024
March 22 outcome was expected, however, when the Fed Committee raised interest rates by 25 basis points (BPS). Before the decision, committee chairman Jerome Powell predicted a possible 50 BPS, according to Bloomberg.
Decision factors in the banks that…
However, this was before the crashes of SVB, Silvergate and Credit Suisse. Nevertheless, the hawkish conditions did not stop Bitcoin from maintaining a bullish streak for a significant number of days.
Regardless, the FOMC admitted that while inflation has remained high, recent bank collapses could lead to stiffer macroeconomic variables. Although the Fed mentioned that the banking system was safe and sound, Powell admitted that the committee was uncertain about the extensive effect of the institutional failures.
Did you miss Federal Reserve Chairman Jerome Powell’s conference call?
Here are the highlights 👇 pic.twitter.com/8XcEWg9QDz
— Bloomberg TV (@BloombergTV) March 22, 2023
The statement read:
“Recent developments are likely to lead to tighter credit conditions for households and businesses and weigh on economic activity, employment and inflation. The extent of these effects is uncertain.”
The politicians’ settlement is the other important external decision that has affected BTC in recent times. About a week ago, the consumer price index (CPI) fell 6% after it was 6.4% in February. But the difference between last week’s event and this was the contrasting BTC response since the CPI laid the foundation for the coin to break $26,000.
Meanwhile, several analysts had been enthusiastic about Bitcoin’s performance before the announcement. For example, Bloomberg’s overall analysis of the market predicted a better performance in the second quarter for BTC.
Bitcoin is hurtling toward its biggest quarterly gain since the start of 2021, and key charts suggest the token has room to keep climbing
— Bloomberg (@business) March 22, 2023
No matter what, BTC bulls maintain the mandate
Cathie Wood, CEO of ARK Invest and an extreme believer in the Bitcoin movement, doubled down on her opinion that BTC was a safe harbour in today’s economy.
She tweeted:
“The Fed just voted unanimously to raise interest rates. Some data it might depend on: bank credit swaps, bank deposit flows, Bitcoin (flight to safety?), yield curves, commodity prices, housing prices and consumer sentiment.”
Despite this, the stock-to-flow creator, Plan B, appears to be unfazed by BTC’s response to these macroeconomic factors. Instead, he pointed out remarkable observations on the chain.
Realistic or not, here is BTC’s market value in ETH’s terms
According to his latest tweet, Bitcoin was now above its realized price in two years. This data suggested that several investors from recent years are now in profit apart from those who largely accumulated in 2021.
Like clockwork (2Y realized is $31k..) pic.twitter.com/V7Ufl03Oct
— PlanB (@100trillionUSD) March 22, 2023
Additionally, he responded to comments below the tweet, saying he expected an adoption rate of 25 to 50% after the halving in 2024. As he mentioned before, the event could push BTC to a new ATH.
