Bitcoin tops above $22.2K as Fed votes for 75 basis point rate hike

by · July 27, 2022

Bitcoin (BTC) charged above $22,000 on July 27 after the US Federal Reserve decided on another major interest rate hike.

BTC/USD 1-Hour Candlestick Chart (Bitstamp). Source: TradingView

Fed: ‘Appropriate’ to continue hiking after July

Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reacted positively to confirmation that the Federal Open Markets Committee (FOMC) had voted unanimously to raise the Fed funds rate by 75 basis points.

“The committee seeks to achieve maximum employment and inflation at a rate of 2% in the longer term,” it said in a press release.

“In support of these objectives, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and expects that ongoing increases in the target range will be appropriate.”

Markets had already expected 75 basis points to be the Fed’s next move. However, commentators increasingly considered the implications of the central bank’s balancing act between taming inflation and avoiding recession going forward.

“Watch the Fed abandon forward guidance and interest rate commitments and embrace data addiction. This cycle of hikes ends at 2pm tomorrow. Buy bonds,” David Rosenberg, founder and president of Rosenberg Research & Associates, tired the day before.

Looking further out, Wall Street macro strategist David Hunter predicted continued relief for risk assets. More relevant was a bet that recent lows would not repeat, a potential boon for Bitcoin bulls given the cryptocurrency’s ongoing correlation to stock markets.

“Regardless of what the Fed decides today (75 or 100 bps), the market is poised for a move higher to the S&P 4,150-4,200 and then perhaps a sharp, brief pullback to 3,800 before a much larger, more sustainable rally to 6,000 begins,” he told he Twitter followers.

“The lows are in. The market is not likely to undermine the June lows.”

At the time of writing, volatility characterized the spot markets as BTC/USD hovered around $22,000. Fed Chair Jerome Powell was set to start a press conference at the time of writing, his language apt to add further headwinds or tailwinds to the market trajectory.

“In addition, the Committee will continue to reduce its holdings of government bonds and agency debt and agency mortgage-backed securities, as described in the Plans to Reduce the Size of the Federal Reserve’s Balance Sheet issued in May,” the press release added. confirmed.

Traders are betting on a Bitcoin boost

Analyzing the market setup, meanwhile, a bullish consensus among traders was palpable.

Related: Will Fed Prevent BTC Price From Reaching $28K? — 5 things to know in Bitcoin this week

Analyst Dylan LeClair noted long positions building on derivatives exchange FTX in the hours before the decision.

As Cointelegraph previously reported, institutional sentiment was seen to improve during the second half of July, according to research from research firm Arcane Research.

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