The US Federal Reserve kept interest rates unchanged at 3.50%-3.75% for the fifth time on Wednesday, triggering mixed signals in traditional and crypto markets.
In divisive votenine members of the Federal Open Market Committee (FOMC) approved the price freeze. Three members objected and called for a 0.25% increase.
According to the Fed, the economy is “growing rapidly” but it says the main uncertainty in the ongoing conflict in the Middle East has kept inflation above 2%.
Following the wordthe stock market in the United States fell. The Dow Jones fell 2.19% while the S&P 500 fell 1.5%. The tech-heavy Nasdaq also posted a loss of 1.74%.
Bitcoin also showed mixed results. It initially peaked at $64.7K before dropping further to $63.2K. But it quickly pared losses at the end of Wednesday’s trading session. At the time of writing, the crypto asset was trading at $64K.
For Ethereum, the altcoin was still holding at the level of $ 1900. However, experts had different opinions on Fed Chair Kevin Warsh’s decision to increase inflation and the impact it would have on the stock and crypto markets.
Will the Fed rate of panic affect crypto in Q3?
It’s worth noting that the crypto market has been on the upswing ahead of Wednesday’s Fed decision, according to Bitfinex analysts. In an email statement, analysts told AMBCrypto that,
Between 23-28 July, US spot bitcoin ETFs recorded four consecutive red periods totaling $526.5 million in outflows.
They added that,
Although this clearly shows the severity of the money coming in, the amount of money going out, together with BTC’s safe storage, shows a short-term risk reduction, not a major withdrawal.
On the day of the Fed’s decision, US Spot BTC ETFs posted $32M in total daily inflows, breaking a four-day streak of consecutive outflows. Whether the demand for BTC institutions will stabilize in the coming days remains to be seen.
Speaking of ETH price changeBitfinex experts felt that it is possible to ‘protect the area’ to prevent the loss of BTC. But the analyst noted that this could be confirmed if BTC bounces back after the FOMC.
Looking ahead, the market was pricing in a 65% chance of a Fed rate hike at the September FOMC meeting.
The odds rose by 10% after Wednesday’s break, suggesting that rising fears may return. If so, dangerous goods may be at risk.
Surprisingly, Options traders were betting heavily on the potential The price of BTC shares exploding above $70K-$75K in late August and September.
Brief Summary
- The US dollar fell after the Fed stopped, but Bitcoin held firm
- While the Fed may be afraid of a hike in September, Options traders were betting on a strong hike of $70K-$75K in Q3.
