Bitcoin Price Skyrockets As Dollar Retreats, Will The Fed Ruin The Rally
Bitcoin price has increased by close to 9% in the last few hours as the broader crypto market recovers. It has crossed the $21K mark again and is currently still going strong. Its price increased by close to 1% in the last hour.
The US dollar index has fallen by 0.85%. The dollar’s show of strength is one of the biggest reasons equities and crypto underperformed. BTC fell by 6% in one day just a few days ago as the dollar soared.
S&P 500 and NASDAQ 100 also soared. Bitcoin, which is strongly correlated to the general market, and especially the tech-oriented NASDAQ, also strengthened as well.
Can The Fed Ruin Bitcoin Price Rally
The Federal Reserve reaffirmed and reiterated its hawkish stance. In his latest speech to Cato Institute, Fed chair Jerome Powell said that the Fed takes responsibility for the price stability in the US. He revealed that the Fed is prepared to take an aggressive stance to combat the sparring inflation.
The likelihood of an unusually large interest rate hike from the Fed increased after Powell’s speech. Powell believes that inflation does not need to just be curbed, but also curbed fast. Otherwise, people can accept the high prices as simply the new normal. The Fed would consider such a scenario to be the worst-case possibility.
The CME Fed Watch tool is showing an 85% likelihood of a 75 bps hike. It is also important to note that the Fed is unlikely to pivot from its stance after the hike. In a recent speech, the CEO of the Cleveland Federal Reserve, Loretta Mester, believes that the Fed will need a target rate of over 400 bps to combat inflation. The current target rate is 225-250 bps.
Key Event To Watch For
Investors will look at the Consumer Price Index data to be released on September 13th at the FOMC meeting. A favorable CPI can push Bitcoin to new highs as a 75 bps hike In September already looks priced in.
- Coinbase CEO Says Market Structure Bill Will Pass by Year-End Despite Government Shutdown
- Breaking: Trump To Meet China’s President On October 30, Bitcoin Bounces
- Breaking: Trump Pardons Binance’s Changpeng “CZ” Zhao, BNB Spikes
- Peter Schiff Challenges Binance Founder CZ to Debate as Bitcoin Vs. Gold Rivalry Heats Up
- Robinhood Lists HYPE As Hyperliquid Flips CZ Backed Aster In Perp DEX Volume
- Dogecoin Price Crash Looms as Flag, Death Cross, Falling DOGE ETF Inflows Coincide
- Solana Price Prediction as Osprey’s S-1 Filing and Hong Kong’s ETF Launch Fuel Reversal Hopes- Is $250 Next?
- Ethereum Price Poised for Breakout as Wyckoff Re-Accumulation Meets BlackRock’s $110M Purchase
- BNB Price Prediction as Analysts Eye $1500 Ahead of Fresh Coinbase and Robinhood Listings
- XRP Price Classical Pattern Points to a Rebound as XRPR ETF Hits $100M Milestone
- Chainlink Price Eyes $27 Rebound as Whales Accumulate 54M LINK
Why Trust CoinGape
CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.
