Cryptocurrency News

Bitcoin price tests $27K support as Fed holds interest rates at FOMC


Bitcoin (BTC) saw snap volatility on Sep. 20 as the United States Federal Reserve maintained interest rates at twenty-year highs.

BTC price digests Fed rate pause

Data from Cointelegraph Markets Pro and TradingView followed BTC price action as it reacted to the rate decision and accompanying commentary from Fed Chair Jerome Powell.

The Federal Open Market Committee (FOMC) opted to keep rates at their previous levels set in July this year.

“The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run,” a press release stated.

“In support of these goals, the Committee decided to maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent.”

Fed funds rate chart. Source: St. Louis Fed

The move was overwhelmingly expected ahead of time by markets, with a 99% probability of a rate hike pause already in place, per data from CME Group’s FedWatch Tool.

The Fed’s language remained cautious over the future of inflation, however, with no guarantee that conditions would become more lax.

“In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals,” the release continued.

Reacting, Michaël van de Poppe, founder and CEO of trading firm Eight, suggested that no more rate hikes would come in future. Bitcoin, he predicted, would benefit.

“No rate hike from the FED. My best guess: we’re done with the hiking policy,” part of an X post read.

“Bitcoin is likely to start trending up from here (yes, a fakeout usually happens at the news).”

Powell hints that another rate hike could come in 2023

BTC price action saw jitters as the decision came, with Powell still to complete his speech at the subsequent press conference at the time of writing.

Related: Bitcoin price all-time high will precede 2024 halving — New prediction

The road to getting inflation down to the Fed’s 2% target, he said, had “a long way to go.”

“If the economy evolves as projected, the median participants projects that the appropriate level of the federal funds rate will be 5.6% at the end of this year, 5.1% at the end of 2024 and 3.9% at the end of 2025,” he said.

Powell noted that the medium projection for the end of the year was unchanged from before, but had moved up 0.5% for the end of the next two years.

BTC/USD continued to hold above $27,000 as a result, with no major exit of the recent intraday trading range.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.