Bitcoin slightly recovered on the news that the Fed reduced the rate of interest rate increase, but still not very positive

Bitcoin and the entire crypto market have received a positive signal of recovery with the news that the Fed will slow down rate hikes. However, it is still not clear that the picture will be entirely brighter for crypto.

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Bitcoin slightly recovered on the news that the Fed reduced the rate of interest rate increase, but still not very positive

The Federal Open Market Committee (FOMC) of the US Federal Reserve (Fed) released the minutes of its November 1-2 meeting showing consensus that the Fed needs to slow down the pace of interest rate hikes. Accordingly, the contents of the minutes are mentioned as follows:

“As monetary policy approaches a sufficiently restrictive stance to achieve the Committee's goals, it is appropriate to slow the rate of increase within the target range for the federal funds rate. In addition, the majority of meeting participants assessed that a slower rate of growth is likely to be feasible.”

Immediately after the above information was released, the crypto market immediately “danced”, Bitcoin bounced slightly from the $16,300 mark to $16,700 and quickly returned to where it started before entering a steady upward momentum. At press time trading around $16,714.

1H chart of BTC/USDT price. Source: Binance

On the other hand, the Fed's rate cut signal also kept the strength of the US dollar (DXY) thwarted. DXY has extended its "dark" streak, dropping more than 0.9% over the past 24 hours to trade at 105.7. A weaker US Dollar is always a positive driver for Bitcoin.

DXY strength chart. Source: TradingView

However, it is still not possible to confirm the ability of the Fed's "light hand" this time to make the market fully recover. Because in November 2022, crypto seems to have been significantly separated from the macro news and the US stock market due to the severe impact of the collapse of the FTX exchange as well as the chain of dominoes. from many major crypto companies in the market.

The proof is that while US stocks continued to surge strongly last week when the S&P 500, Nasdaq 100 and Dow Jones all regained all that was lost after the recession in September and October 2022, Bitcoin is still quite good. struggling with a range of 16,000 - 17,000 USD.

Not to mention another potential risk waiting to cause market chaos that few investors pay attention to is the danger of the BTC mining community. The difficult context in terms of costs, business operations, and extremely “catastrophic” price movements of BTC have pushed them to the edge of the abyss, selling pressure caused by miners recorded in November 2022 exceeded the highest level for the whole of 2021.

 

FoxCryptoNews summary

Nov 24, 2022

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