Bitcoin's price fluctuates as Fed maintains high interest rates amid inflation concerns.

Bitcoin’s price briefly soared to $59,300 following a selloff that dipped it below $56,700 earlier today, according to CoinGecko’s data. The resurgence came after the Federal Reserve (Fed) had decided to maintain interest rates between 525 and 550 basis points.
In a statement announcing the hold, Powell said the decision to hold rates steady was due to high inflation. As he noted, the Fed plans to continue reducing public bond sales, yet the remaining bonds continue to be sold at the same pace.

“Today, the FOMC decided to leave our policy interest rate unchanged and to continue to reduce our securities holdings, though at a slower pace,” stated Powell, “…in recent months inflation has shown a lack of further progress toward our 2 percent objective, and we remain highly attentive to inflation risks.”

Powell noted the solid pace of economic expansion, strong job gains, and low unemployment, despite inflation remaining above the desired 2 percent target.

“Economic activity has continued to expand at a solid pace,” he said. “Job gains have remained strong, and the unemployment rate has remained low. Inflation has eased over the past year but remains elevated.”

According to him, inflation has exceeded expectations in the short term, yet aligns with long-term forecasts. Due to these higher-than-anticipated inflation indicators, the central bank remains hesitant to lower interest rates.


The Fed has indicated that it will maintain elevated interest rates for an extended period. However, it also noted that it would consider adjusting its policy should there be an increase in unemployment.

Fed Chair: “I don’t see the stag or the flation”

In contrast to the previous belief that Powell could have a hawkish stance, he maintained a neutral stance during his speech today.

Addressing a series of questions from the media about the state of the world’s economic powerhouse, Powell said there is a low likelihood of raising interest rates further, as current data does not support such a move. According to him, the Fed believes that the current high-interest rates are sufficient to guide inflation back toward the 2% target.

Speaking of stagflation risks, he expressed skepticism about the claim that the US has entered a period of stagflation, which is characterized by high inflation coupled with economic decline.

According to Powell, the defining conditions of stagflation won’t last or fully develop because inflation will eventually decrease.

“I don’t see the ‘stag’ or the ‘-flation’,” Powell said. “I don’t really understand where that’s coming from,” he added.

Despite Powell’s neutral stance, Bitcoin’s regained momentum faltered. After briefly surpassing $59,000, it couldn’t hold above this key level. CoinGecko data shows Bitcoin is currently trading at around $57,300, a 3.4% drop in one hour.

Similarly, top ten altcoins experienced a modest post-Fed decision rally, with gains between 0.5% and 2.5%. However, this short-lived bounce quickly fizzled out.

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The firm's head of digital assets research links Bitcoin's downturn to US inflation and ETF outflows.

Stubborn inflation, the unlikelihood of near-term rate cuts, and cooling demand for spot Bitcoin exchange-traded funds (ETFs) – all of these factors could prolong Bitcoin’s price correction to $50,000, according to Standard Chartered.

“BTC’s proper break below $60K has now reopened a route to the $50-52K range,” Geoffrey Kendrick, head of digital assets research at Standard Chartered told The Block, adding that the downward trend is attributed to a mix of crypto-specific factors and broader economic conditions.

Bitcoin’s ongoing price decline coincides with a series of outflows from US spot Bitcoin ETFs and the lukewarm reception of similar products in Hong Kong.


Kendrick points out that liquidity measures in the US have deteriorated, which negatively affects assets like cryptos that typically benefit from high liquidity environments.
The backdrop of strong US inflation and the reduced likelihood of Fed rate cuts are further contributing to tightening liquidity, impacting investment flows into riskier assets like Bitcoin, he noted.

Bitcoin wobbles ahead of the upcoming FOMC meeting. Yesterday, Bitcoin’s price plunged as low as $59,500 and extended its correction to $57,000 earlier this morning in the lead-up to the Fed’s key decision.

Kendrick suggests that a potential re-entry into Bitcoin could be considered in the $50,000 to $52,000 range, especially if upcoming US Consumer Price Index (CPI) data proves to be favorable, potentially easing some macroeconomic pressures.

“Of course, liquidity matters when it matters, but with a backdrop of strong U.S. inflation data and less likelihood of Fed rate cuts, it matters at the moment,” he explained. “Re-enter BTC in the $50-52k range or if US CPI on the 15th is friendly.”

Standard Chartered doubles down on its $150,000 price target by year-end

Kendrick stated in an interview with Bloomberg BNN last month that Bitcoin could hit $150,000 by the end of this year and rise to $200,000 by the end of 2025.

Despite the current market dynamics, he reaffirmed these price targets for 2024 and 2025. The analyst told The Block that while progress might be slow at first, a significant rally could be expected closer to the anticipated Trump election victory, particularly from September through to the end of the year.

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.


Crypto Briefing may augment articles with AI-generated content created by Crypto Briefing’s own proprietary AI platform. We use AI as a tool to deliver fast, valuable and actionable information without losing the insight - and oversight - of experienced crypto natives. All AI augmented content is carefully reviewed, including for factural accuracy, by our editors and writers, and always draws from multiple primary and secondary sources when available to create our stories and articles.

You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.

Crypto market sinks ahead of Fed decision on interest rates

In the lead-up to the upcoming Federal Reserve meeting, investor pessimism has significantly impacted the prices of Bitcoin and Ethereum.

As of the time of writing, BTC has dropped 7.6%, and ETH is down 6% over the past 24 hours. The Bitcoin price is currently hovering around $57,000, while the Ethereum price is stuck at just under $2,900, according to data from CoinGecko.


The volatility has been particularly challenging for derivatives traders, with $457 million worth of crypto futures positions liquidated in the past 24 hours, according to data from CoinGlass. Unsurprisingly, $392 million of those liquidations were long contracts, where traders had placed bets on future price increases.

The sagging prices have been widespread throughout the market, with few assets in the top 100 cryptocurrencies by market capitalization on CoinGecko escaping the sea of red, aside from stablecoins that have managed to maintain their pegs, such as Tether (USDT) and Circle’s USDC.

The US Federal Open Markets Committee is set to publish its interest rate decision at 2 PM (Eastern Time) today, followed by a press conference with Fed Chair Jerome Powell at 2:30 PM. In February, investors seemed certain that May would be the month the FOMC finally cut interest rates, which is typically a bullish sign for risk assets like Bitcoin. Lower interest rates usually encourage traders to move out of US Treasuries and chase gains in riskier assets, such as equities and crypto assets.

However, the Fed’s key interest rate currently stands at a high of 5.25% to 5.5% and has been unchanged since July 2023 as the central bank aims to curb inflation. Policymakers have been closely monitoring inflation, which is currently at 3.5%, hoping to bring it closer to 2% before considering rate reductions. Last month, inflation increased to its highest level since September, making the prospect of rate cuts more distant.

In March, the Swiss Central Bank announced it was cutting interest rates, providing some hope for traders. However, this sentiment hasn’t spread to other major central banks. Months prior, traders seemed certain that the Fed might lower interest rates in June, according to the CME Fed Watch tool. Sentiment has since soured, with more expectation surrounding the Fed not easing out interest rates until at least the end of this year.