What Happens to Bitcoin Price Post 25 Bps Fed Rate Hike?

Bitcoin price held above $76,000 on Sept. 17 after the Federal Reserve raised interest rates by 25 basis points. BTC recovered from lows near $75,000 and traded around $76,400-$76,700 during the session.

The limited reaction suggests much of the September rate increase had already been priced into the market. However, Federal Reserve projections and a new Goldman Sachs forecast indicate that monetary tightening may not be finished.

Can Bitcoin Price Hold the August Lows At $75,500?

Popular analyst Daan Crypto Trades pointed out that Bitcoin price remains near its August lows and the 4-hour 200-day moving average (MA) and exponential moving average (EMA). BTC showed little reaction to the US central bank’s rate hike.

The analyst noted that the rate decision and the CLARITY Act vote have now cleared two major events that dominated Bitcoin’s price action over the past week. Regardless of the outcomes, removing these events from the market could lead to less choppy trading, added the analyst.

Bitcoin on-chain activity has fallen to one of its most subdued levels on record, with just 3.8 million BTC moving over the past 180 days, according to K33 Research. The firm said the unusually low activity suggests that selling pressure is fading. It added that the Bitcoin price is showing signs that it has passed its cycle bottom.

Bitcoin Price UTXO Shows Bear Cycle Is Unlikely

CryptoQuant analyst Crypto Dan noted that the percentage of Bitcoin UTXOs held at a loss has declined sharply. He said that the magnitude of the drop signals a shift from a bearish market cycle toward a bullish phase.

Looking at the previous market cycles, declines of similar scale have historically represented more than short-term rebounds. This has often led to the end of the bearish phase, while moving into bullish cycles.

The analyst added that once the impact of macro events subsides, it can put an end to the Bitcoin bear cycle. Another market analyst, Ali Martinez noted that he is prepared for further Bitcoin volatility following the recent rate hike and would not be concerned by a potential sell-off. The analyst identified the Short-Term Holder Realized Price near $71,200 as his next major accumulation zone.

Goldman Sachs Expects Another 25bps Fed Rate Hike in October

Goldman Sachs now expects the Federal Reserve to raise interest rates by another 25 basis points in October, following the 25bps hike delivered this week.

The latest increase was the Fed’s first rate hike since July 2023. Federal Reserve officials have also projected another 25bps increase later this year, potentially taking the policy rate to 4.00%-4.25%.

The outlook suggests that the Fed’s tightening cycle may continue as Kevin Warsh look keen to bring inflation to the 2% target.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency investments involve risk, and on-chain indicators, interest-rate forecasts or technical levels do not guarantee future price performance.