Bitcoin soars after the Fed meeting

After a three-day closed-door meeting, the Fed announced an increase in interest rates by 0.5 percentage points. This is the highest interest rate increase in the past 22 years, but this move is completely within the forecast of experts.

Bitcoin price reacts positively after the Fed meeting. (Image: Getty Images)

The information that the interest rate increased by only 0.5 percentage points was announced by the Fed, causing the price to increase Bitcoin strong bullish reversal after a correction day ahead of rumors.

On the morning of May 5, there was a time when Bitcoin traded at 40,000 USD. Currently the world’s largest cryptocurrency is priced at 39,600 USD, up 4.5% from the previous day. The total market capitalization of Bitcoin also returned to the mark 750 billion USD.

The sharp increase in Bitcoin price caused many large-cap cryptocurrencies to increase, the market was filled with green. Altcoins have strong gains, 5 – 20%. The world’s second largest cryptocurrency, Ethereum is currently trading around 2,900 USD, an increase of more than 5% compared to yesterday (4/5). Polkadot, Cardano, Avalanche, Solana, TRON all surged 10-20%.

Before that, on May 4, the Bitcoin price “slides” in the red, reaching more than 37,000 USD, bringing the market capitalization at 721 billion USD.

The cryptocurrency market reacts quite positively to new information. The investor community’s sentiment index is at 27 points, around the fear zone, according to Alternative. On May 4, this index dropped to 21 points, in the extreme fear zone.

Since the beginning of the year, market sentiment has fluctuated around the zone of extreme fear and fear. This proves the shift of investors in risk appetite. In 2021, the market’s index is often at a positive level. When the price of Bitcoin and cryptocurrencies skyrocketed in November 2021, the general feeling of the community was extreme greed.

The fact that Fed Chairman Jerome Powell ruled out a 75 point (0.75%) increase in interest rates has supported Bitcoin’s bullish momentum. “A 75-point increase is not something the committee is seriously looking at. I would expect to see inflation flat,” Mr. Powell said after the meeting.

While Nick Mancini, Research Director at the cryptocurrency sentiment analysis platform Trade The Chain, said that any information from the Fed, except for an increase in interest rates by more than 0.75%, will stimulate price increases for investors. stocks and cryptocurrencies.

“I think the market is going to see a 0.25-0.5% increase in price between now and the end of the year. This provides some certainty, favoring the bulls,” Mancini said. CNBC.

In addition, according to experts, two major Argentine banks have just allowed cryptocurrency trading on their platforms, which has had a positive impact on the Bitcoin price.

Banco Galicia – Argentina’s largest private bank by market capitalization, and Brubank Digital Bank SAU have just allowed customers to trade cryptocurrencies including Bitcoin, Ether and USDC.

Along with that, in a recent filing with the US Securities and Exchange Commission (SEC), Tesla Inc. has reiterated its pro-Bitcoin stance, and stated that Bitcoin has potential in the future. and can be a liquid substitute for cash.

Tesla in April 2022 also announced a partnership with BlockStream and Block, Tesla energy equipment that will be used for a $12 million Bitcoin mining facility. These moves by Tesla give Bitcoin more momentum.

Bitcoin goes through a period of constant volatility after peaking 68,000 USD in November 2021. The world’s largest cryptocurrency is still a high-risk asset, so it is seriously affected by inflation, the conflict in Ukraine and the strict policy of the Fed. However, compared to stocks of technology companies such as Meta, Paypal, Netflix, Bitcoin is still less volatile.

Bitcoin’s rally is similar to the stock market. When Bitcoin Returns to Milestone 40,000 USDthe S&P 500 gained 2.9%, the Nasdaq gained more than 3% at the close.

Bitcoin Could Fall to $24,000

VTV.vn – Last week, Bitcoin price plummeted along with the stock market. Given the current price volatility, some analysts predict Bitcoin to bottom out at $24,000 this year.

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