Following the announcement of the Fed interest rate cut, BTC price broke a key price support, raising concerns about a continued decline.
The Federal Reserve announced on Wednesday that it would keep its interest rate unchanged at 5.25% for the first time since January 2022. Inflation appears to be declining, according to the Fed, and it wants to see whether previous rate hikes were enough to slow the rise in prices. However, it was indicated that if inflation does not appear to be coming down and concerns remain, the rate may rise.
In a press conference, the Fed chairman, Jerome Powell, where did it go,
“As we get closer and closer to our destination (peak rate), it is reasonable and common sense to slow down a bit.”
The unemployment rate report also showed that the final figures exceeded expectations. The Fed predicted that the unemployment rate would fall from 4.5% to 4.1%. However, the real result was even lower, falling to 3.7%, meaning the labor market is performing better than the Fed expected. The low unemployment rate suggests that the current state of the economy can withstand higher interest rates without significant job losses.
Even with the interest rate freeze, there is speculation that rates could be raised twice before the end of the year, depending on how close the economy gets to its 2% inflation target. Powell also agrees that there may be a case for raising interest rates at the end of the year, but only gradually.
BTC price falls further after Fed interest rate pause
The interest rate news and several subsequent announcements were positive for the US Dollar, strengthening it against many currencies. Significantly, the price of Bitcoin A key support level was broken, raising concerns about a continued decline in the price.
The BTC price has been below $31,000 since April 14. This price represents the highest point that the market has reached this year after a prolonged bearish market that lasted through most of 2022. Yesterday’s announcement finally broke the $25,700 support after more than five weeks of consolidating between $28,000 and $25,700.
Bitcoin price is now correcting towards a key support at $24,300. If this support fails to hold, it could continue to decline towards the $22,000 area, where the next key support lies.
Given that the price of bitcoin greatly influences the market sentiment towards cryptocurrencies, the prices of other cryptos may also continue to decline if the bearish trend persists. Ethereum, for example, even broke the $1770 support and is currently moving towards the $1600 support. Considering the price direction of the leading cryptocurrency, those anticipating a major bull run may need to be a little more patient.
Temytop is a writer with over four years of experience writing in various fields. He has a special interest in the fintech and blockchain space and enjoys writing articles in those areas. He holds bachelor’s and master’s degrees in linguistics. When not writing, he trades forex and plays video games.
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