Bitcoin saw more volatility on Wednesday following a Federal Open Markets Committee meeting, during which the U.S. central bank agreed to raise its benchmark interest rate by 0.5%.
The announcement, which aligned with market expectations, signals the Fed’s first movement this year to slow the hawkish momentum of monetary policy.
- As the Federal Reserve unveiled its decision at 14:00 EDT, Bitcoin immediately fell from $18,300 to $17,850 within five minutes.
- The asset reversed course shortly after, trading for $17,960 at writing time.
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- According to data from CoinGlass, the crypto market move has contributed to $44 million in liquidations within the past 24 hours, most of which came from Bitcoin trades.
- The largest single liquidation was for an ETH-BUSD trade on Binance for $1.04 million
- Going into the meeting, the market priced in a roughly 80% chance of a 50 basis point rise, with a 20% likelihood of a fifth 75-point rise, according to the CME’s FedWatch tool. With the prior ringing true, the central bank’s target rate lies between 4.25% and 4.5%.
- The Fed has raised rates throughout 2022 in an effort to combat record-high CPI inflation. With November’s inflation numbers showing signs that their efforts are working, market participants expect the hikes to slow heading into 2023.
- Numerous other central banks appear to be reeling in rates as well. The Bank of Canada announced a 50 basis point hike back in October, with the Bank of England following suit in September.
- The United Nations has pressured the Federal Reserve to reverse course on its interest rate boosts for months, citing risks of a potential global recession. Indeed, many crypto industry companies have already been forced to enact mass layoffs this year, often in response to macroeconomic concerns.
The post Bitcoin Falls Below $18k After Federal Reserves Announces 50bps Rate Hike appeared first on CryptoPotato.
