The recent decision by the Federal Open Market Committee (FOMC) to maintain US interest rates within the 5.25% to 5.50% range, a status quo held since July 2023, has elicited mixed reactions within the cryptocurrency community.
While unchanged rates would typically be cause for celebration in traditional markets, many in the crypto sphere were actually hoping for a different outcome this May 1st.
🇺🇸 The latest #FOMC decision has resulted in leaving US Interest Rates unchanged, continuing at a 5.25% to 5.50% range as it has stayed since July, 2023. In 2022, unchanged rates would be news worth celebrating.
However, many in #crypto were actually hoping for this May 1st… pic.twitter.com/evHQ68Iizq
— Santiment (@santimentfeed) May 1, 2024
There was a collective anticipation among crypto enthusiasts for a potential interest rate cut, which was seen as a catalyst to bolster equity market caps and, by extension, cryptocurrencies. However, Federal Reserve Chairman Jerome Powell clarified that the Fed’s preference is to keep rates stable until inflation subsides to the target level of 2%.
While the decision may not have met the expectations of some crypto investors, the market reaction has been somewhat nuanced. In the immediate aftermath of the announcement, several altcoins experienced breakout moments, suggesting that traders are gradually regaining confidence in making speculative investments as uncertainty surrounding the interest rate decision dissipates.
Possible Bitcoin Price Rebound Ahead
Analysts, including Ali Martinez, have pointed to key indicators that suggest a potential rebound in Bitcoin prices. The Bitcoin 30-day MVRV, currently at -11.6%, has historically signaled buying opportunities when dropping below certain thresholds. Additionally, the TD Sequential indicator has presented a buy signal on the Bitcoin 4-hour chart, indicating a possible rebound in the near term.
The last three times the #Bitcoin 30-day MVRV dropped below -9% in the last two years, the price of $BTC surged by 64%, 63%, and 99%, respectively.
The #BTC 30-day MVRV is currently at -11.6%, suggesting it may be time to buy the dip! pic.twitter.com/Q85skH7Hyj
— Ali (@ali_charts) May 1, 2024
However, amidst these potential bullish signals, there have been notable outflows from Bitcoin exchange-traded funds (ETFs). The largest single-day net outflow of -$564 million on May 1, 2024, reflects a cautious sentiment among investors, marking the sixth consecutive day of negative net inflows, the longest streak recorded.
🚨 $BTC #ETF Net Inflow May 1, 2024: -$564M!
• This is the largest single-day net outflow that the 10 #BitcoinETFs have ever experienced.
• All 10 Bitcoin ETFs had single-day outflows, notably with #BlackRock iShares Bitcoin Trust $IBIT seeing the first outflow since its… pic.twitter.com/YJ6xNivYqU
— Spot On Chain (@spotonchain) May 2, 2024
As the cryptocurrency market navigates through the implications of the FOMC decision, investors are closely monitoring indicators and market dynamics for cues on potential price movements and investment opportunities in the days ahead.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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