Bitcoin Consolidates as Fed Starts Two-Day Meeting

2 years ago

Bitcoin (BTC) trimmed some of its losses from earlier in the day on Tuesday as market participants turned their focus to the expected interest rate hike by the US Federal Reserve on Wednesday.

At 16:56 UTC, the price of BTC stood at USD 39,199, up a mere 0.7% for the past 24 hours and 3% for the past 7 days. Meanwhile, the price of ethereum (ETH) stood at USD 2,604, up 1.5% in a day and 4% in a week.

The situation in the stock market was also similar, with the important US S&P 500 stock index up 1.56% for the day at the same time. In Russia, meanwhile, the stock market remained closed for the third week this week after heavy sanctions have hit the country as it attacked Ukraine.

The moves in the market came as market players turned their focus to a Federal Reserve meeting that starts today and concludes on Wednesday with an interest rate announcement from the Federal Open Market Committee (FOMC).

It is widely expected that the Fed will announce a rate hike of 25 basis points, marking the first rate hike in the US since before the pandemic.

Despite the rate hike marking an important moment, the Fed has for a long time communicated its intention to raise rates to the market. The event is therefore unlikely to have any major impact on markets, whether in crypto or otherwise, according to experts.

“I don’t see the Fed surprising anyone <...>. It’s going to be a quarter-point and then step into the background and watch what’s happening in Europe,” Steve Massocca, Managing Director at Wedbush Securities, told CNBC.

The same also appears to be the prevailing attitude among bitcoin investors, with the price remaining fairly stable for the day, consolidating right below the key USD 40,000 level.

"The prospect of a Federal Reserve interest rate hike, the ongoing tragedy of the Russia-Ukraine war, and China once again battling COVID are all weighing on trader sentiment across different asset classes. A rout in Chinese stocks shows once again how the global pandemic can violently move markets," the Bitfinex trading team said in a note.

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