Bitcoin price whipsaws as Fed says rate hikes may not be ‘appropriate’
Bitcoin (BTC) saw significant volatility on March 22 when the US Federal Reserve hinted that it may halt interest rate hikes.
Powell on rates: “‘May’ and ‘some’ instead of ‘ongoing'”
Data from Cointelegraph Markets Pro and TradingView showed sharp moves both up and down for BTC/USD as the Fed hiked by an expected 25 basis points.
During a press conference, Fed Chairman Jerome Powell appeared to play down the ongoing US banking crisis and its aftermath, while suggesting that today’s rate hike could be the last.
In prepared remarks, Powell said the Fed believes that “events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which in turn will affect economic outcomes.”
“It is too early to determine the extent of these effects, and therefore too early to say how monetary policy should respond,” he said.
“As a result, we are no longer saying that we expect ongoing interest rate increases to be appropriate to curb inflation. Instead, we now expect that some further policy expansion may be appropriate.”
BTC/USD initially saw local lows of $27,867 on Bitstamp around the events before returning to trade above $28,000, only to continue falling at the time of writing as markets continued to digest Powell’s response to press inquiries.
On rate hikes in particular, he said the terms “may” and “some” as opposed to “ongoing” would be best to describe future policy.
Some commentators reacted nonetheless, describing Powell’s Fed as “hawkish” in prioritizing inflation over the banking crisis by continuing the hike.
“The Fed has so far shown it is committed to higher interest rates for longer + inflation as enemy #1,” Tedtalksmacro wrote in part of the Twitter follow-up.
The BTC price is coming full circle
Bitcoin thus did not deliver the journey to $30,000 that some had hoped for ahead of the rate hike decision.
Related: Will Fed Stop Rate Hikes? 5 things to know in Bitcoin this week
“Shorts liquidated and then longs liquidated. Back to the same price we had an hour ago, summarized analyst Matthew Hyland.
Data from monitoring resource Coinglass estimates total crypto liquidations for the day at $36 million and $78 million for shorts and longs, respectively.
The views, thoughts and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
