Fed’s Biggest Rate Raise Since 2000, Bitcoin Still in Danger Zone
The move marks the biggest rate hike the agency has made since May 2000. Over the past 20 years, the Fed has usually only raised interest rates by 0.25%, showing how serious inflation is at the moment.
During the trading day of May 4 in the New York market, Bitcoin (BTC) at one point increased by more than 5%, reaching $ 40,000 before correcting after the meeting on monetary policy ended. On the morning of May 5 at the Asian session, BTC was trading at $39,600.
The market leader’s Fear & Greed Index technical indicator is in the “extreme fear” zone, showing that crypto investors are wary of the signs. macro instability.
Since November 2021, BTC market sentiment has shifted from “extreme greed” to “fear”.
The BTC market capitalization contributes to 10% of the Fear & Greed indicator. Year-to-date, this cryptocurrency has outperformed other altcoins (altcoins), but the last few days have been experiencing a slight correction. This could be due to a short-term shift in traders’ sentiment, especially when stocks and cryptocurrencies are at their strongest.
Despite soaring to $40,000, Bitcoin is still in danger zone as the overall market trend is bearish. BTC needs to hold steady at the $35,000 price zone before resurfacing the $48,000 mark to start a long-term uptrend.
Also in the meeting on May 4, the FED said that it is implementing the interest rate target in the range of 0.75% to 1.00%. Some agency officials support an increase to 2.5% between now and the end of the year. However, Fed Chairman Jerome Powell reassured that the central bank would not consider raising the base rate to 0.75% in the short term.
The agency expects the rate hikes will reduce consumer and business spending in response to inflation. Meanwhile, high interest rates also sucked money out of the stock market as well as speculative assets like cryptocurrencies.
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