Summary
- Bitcoin (BTC) turned more volatile immediately after the Fed’s rate increase, swinging between $75,000 and $76,500.
- The Fed raised its benchmark rate by 0.25 percentage point to 3.75% to 4.00%, and 16 of 18 policymakers projected an additional 0.25 percentage-point increase this year.
- Louis Huang, a Bitget analyst, said the market had already priced in the rate increase, but the dot plot made the possibility of further tightening more concrete. He added that energy prices and the Fed’s path for additional rate increases would be the main variables for the crypto market.
Forecast Trend Report by Period
Bitcoin turned volatile immediately after the Federal Reserve raised interest rates for the first time in more than three years, swinging between $75,000 and $76,500.
The Block reported on September 16 that Bitcoin traded around $75,600 after moving within that range immediately following the Federal Open Market Committee’s rate decision. Ether also fluctuated between $2,370 and $2,430 before trading near $2,376.
The Fed unanimously raised its benchmark rate by 0.25 percentage point at the day’s FOMC meeting, setting the target range at 3.75% to 4.00%. It was the central bank’s first rate increase since July 2023.
The move was largely expected. Just before the decision, CME FedWatch showed a 92% probability of a 0.25 percentage-point increase.
Fed Chair Kevin Warsh told reporters the U.S. economy was strengthening and financial conditions were not especially restrictive. “It is difficult to describe broad financial conditions as restrictive,” he said. “We therefore removed some degree of accommodation.”
The Fed also left open the possibility of further rate increases. In the central bank’s economic projections, 16 of 18 policymakers expected at least one additional 0.25 percentage-point increase this year.
The broader crypto market reaction was limited. Most of the top 20 cryptocurrencies by market capitalization were flat to up about 0.5% after the rate decision. XRP rose about 1.5%, Solana gained about 1%, and Zcash jumped 6.5%.
Louis Huang, an analyst at Bitget, said the market had already priced in one rate increase, but the dot plot made the prospect of further tightening more concrete. He added that inflation pressure tied to energy prices and the Fed’s path for additional rate increases would be the key variables for the crypto market.
