On-Chain Data Shows More Bullish Upside For Bitcoin (BTC)

The Federal Open Market Committee (FOMC) announcement of an interest rate hike has seen Bitcoin and the rest of the crypto market trading in the green. The trend may continue according to on-chain data from Santiment.

The Bitcoin market had already factored in interest rate spike

Following the FOMC announcement, Santiment tweeted that the crypto market can now claim to be battle-tested for monetary policy adjustments. The on-chain market behavior analysis noted that the first rate hike since 2018 led to a price bounce in Bitcoin and a surge in altcoins.

For Santiment, the market reaction is a good sign. This is because it indicates that the market had “partially” braced itself already for the FOMC move.

Santiment based its analysis on data that pointed to the fact that discussions around FOMC and inflation have been acting as “reliable price direction shift indicators.”

Before the FOMC announcement yesterday, Santiment had also observed the bullish signal in the market. In a tweet, it noted a significant social volume rise in Bitcoin as a promising sign of how the market would react.

When the FOMC finally announced a 0.25% rate hike, Bitcoin surged to an intra-day high of $41,348. The market-leading cryptocurrency is trading at around $40,600, up 2.98% on the day.

The rest of the crypto market has tagged along with Bitcoin’s uptick. The crypto market is up 3.5% in the last 24 hours.

More Upside for Bitcoin?

The data points to the potential for more sustained growth in the price of Bitcoin in the coming days. This is especially as the FOMC has up to six more rate hikes in its plans for the US market in 2022. The Fed as well plans to greatly reduce its balance sheet as the year progresses to aggressively tackle inflation.

For Bitcoin proponents, this should play out in favor of the adoption of the pioneer cryptocurrency. According to Mike Novogratz, the founder and CEO of Galaxy Digital, viral adoption of Bitcoin is what will drive its price to $500,000 in the next five years.