Bitcoin showed little immediate reaction to the Federal Reserve’s rate increase, then rose modestly as markets assessed the prospect of further tightening and historical parallels with 2022.
Bitcoin barely moves after the Fed decision
The Federal Reserve’s rate-increase vote was unanimous, but Bitcoin had little immediate reaction to the announcement. It held near $76,000 before and after the decision and later traded at $76,621.
A modest rebound followed the announcement
Bitcoin rose 1.35% over 24 hours in one market reading and 0.88% in another, while recording around $15.5 million in net spot buying. The move coincided with approximately $82 million in net selling through perpetual futures over the preceding hour.
The 2022 comparison cuts both ways
The earlier tightening cycle offers a mixed historical comparison. Bitcoin rallied roughly 18% in the 12 days after the initial March 2022 rate hike, then subsequently fell around 50%. It was already down roughly 40% from its peak when the Fed first raised rates in March 2022.
The broader backdrop remains restrictive
Bitcoin is currently about 40% below its October record high of $126,000. Core inflation has eased to 2.4%, while markets are pricing in a further 75 basis points of tightening over the next six months.
Positioning remains a source of volatility
- Onchain support for Bitcoin thickened at $68,000. [044826c8-a3e9-5519-bf38-0798acc44c44]
- Bitcoin saw approximately $82 million in net selling through perpetual futures over the past hour. [0d480bb8-5aa5-5898-b73d-04e31182bf1f]
- Around 2,170 Bitcoin moved onto exchanges after the rate increase, followed by a withdrawal of 1,260 Bitcoin. [fcaa768c-35d3-5d1b-838e-49741a9660a4, f8314382-b6dd-5964-b960-c514f8036fd5]