This month, the crypto markets have rallied for the second time following US economic news.
On Wednesday, following the Federal Open Market Committee (FOMC) meeting, the Fed decided to raise rates by 0.75%, causing crypto and equity markets to rally, with Bitcoin and Ethereum rising over 8% and 15%, respectively causing the entire crypto market cap to rise above $1 trillion again.
Notably, there had been substantial fears that in the face of unwavering inflation data, as revealed in the CPI data released by the US Labor Department last week, the Fed would raise rates by 1%. However, this was not the case; the perceived risk markets showed significant gains.
🗣️Good Morning fam!
📅The Fed's FOMC 🇺🇸 will announce its decision on interest rates today. If it is 0.75%, the S&P 500 (SPX) index will fly higher along with #Bitcoin 🚀; if it is 1%, all markets will go down.😡
Hold on to your pants because curves are coming.. 🤦🏻♂️🤦🏻♂️ pic.twitter.com/0azQUCVQ32
— John Squire (@JuanfraEscudero) July 27, 2022
It is worth noting that Fed chair Jerome Powell in his opening statement at the press conference following the FOMC meeting, hinted at reducing rate hikes in the coming months.
“We will continue to make our decisions meeting by meeting and communicate our thinking as clearly as possible. As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation,” Powell said in his opening statement to the press.
He further said: “I do not think the U.S. is currently in a recession; it doesn’t make sense that the U.S. would be in recession.”
Meanwhile, it is the second time the crypto markets have reacted positively to major US economic news this month. Notably, the markets showed significant strength following the release of US CPI data, despite inflation being at 41-year highs.
At the time of writing, the crypto market continues to post gains. Bitcoin is up 9.5% in the last 24 hours, sitting above the $23k price point. Ethereum is again trading above the $1,600 price point, up 14.22% in the last 24 hours. Finally, Polygon MATIC, which led the previous rally following the US CPI data release, is up 13.67%, trading at about $0.88.
From a pure price action point of view, it would be interesting to see Bitcoin break past the $25k price point to form a new local high as it has broken the daily range yet again.