Crypto markets have been pumping since the announcement of a 75 basis point interest rate hike in the United States, with experts pointing out that the market could be on the rise for the worse.
On July 27, the price of Bitcoin (BTC) surged around 8% to the mid $22,500 mark following the Federal Open Market Committee’s (FOMC) decision to raise interest rates again. Many other top crypto assets have also seen gains in value, with Ether (ETH), Polkadot (DOT) and Polygon (MATIC) all seeing double-digit gains over the past 24 hours.
Founder of Quantum Economics and CEO Mati Greenspan on Wednesday jokingly asked if this was a “bullish rate hike” on Twitter.
Speaking to Cointelegraph, Greenspan noted that investors were clearly expecting the worst and suggested this latest bounce was nothing out of the ordinary.
“The market is happy to go up on Fed day, even if the decision is difficult. Powell is especially adept at delivering bad news. Clearly investors expect worse.
The market expects a bigger increase. https://t.co/HkR8Upfi52
— Mati Greenspan (@MatiGreenspan) July 27, 2022
The Fed’s efforts to reduce inflation by increasing interest rates are usually associated with the withdrawal of investment activity in the market.
However, there are different opinions in the community about what the latest is the pump will have enough momentum to sustain the riseor if a significant retracement is on the cards before the market begins to fully recover.
Don’t you see that the price is only between 19k and 23k during the downtrend and shows no signs of accumulation?
If you want to buy here, go ahead. Then do not regret and cry if the market makes a new bottom, which is likely.
I didn’t buy it.
— il Capo Of Crypto (@CryptoCapo_) July 27, 2022
Pav Hundal, an analyst at the Australian crypto exchange Swyftx told Cointelegraph that the company was “surprised at the exuberance of the reaction to yesterday’s rate hike,” as the underlying macro landscape still appears to be up in the air.
The Fed says one thing and the market seems to hear another every time we see a rate hike. In June, the Fed suggested that a large rate hike would be ‘uncommon,’ while Jay Powell hinted that increases might be ‘slow’.
“The best indicator of what’s to come is the underlying economic data and at least for now, it looks like some inflationary pressures are easing, with gas prices falling along with futures for staples like corn and wheat, as well as some shipping costs,” he added.
related: The ‘cup and handle’ pattern of Ethereum price shows a potential breakout versus Bitcoin
Hundal then noted that Swyftx saw a 100% increase in early trading around the news, indicating that “clearly a lot of people are looking at the value of the current market price.”
The analyst emphasized that a broader bullish or bearish trend will not be seen until the US releases important data related to the performance of the gross domestic product (GDP) in the coming days, which could signal whether the country is officially in recession or not. :
“The good news is that we don’t have to wait long to see what happens in the crypto market when the initial volatility disappears. The US will release GDP data and it will be a big stress test. Any negative sentiment here could wipe out the new gains.
“But if the macro landscape starts to show signs of resilience, we could see the crypto market cap stabilize at the $1 trillion USD point and rally from there,” he added.
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