Fed's decision to keep interest rates unchanged and investor caution affect the crypto market
In the context of the cryptocurrency market, Bitcoin [BTC] remained stable at a price of nearly $104,794, reflecting a sideways trend following the decision of the US Federal Reserve (Fed) to keep interest rates unchanged. Despite a slight increase in daily performance, the overall cryptocurrency market remained quite quiet.
The Fed's interest rate remains in the range of 4.25% to 4.5%, causing strong fluctuations in the crypto market, according to The New York Times. Investor sentiment remains cautious due to the uncertainty about monetary policy in the coming time.
Market reaction to Fed's decision to keep interest rates unchanged
While the cryptocurrency market has been sluggish, ETFs have been showing strength. The Spot Bitcoin ETF has attracted $388.3 million in inflows, while the Ethereum ETF has attracted $19.1 million, according to Farside Investors. This shows that institutional investor interest remains strong, even amid a broader market slowdown.
In fact, the Fed decided to keep interest rates in the range of 4.25% to 4.5%, as discussed in The New York Times. Analysts remain divided on whether the rate cut will be sooner or later, keeping the market cautious.
Politician Trump criticizes Fed Chairman, increasing tension
As the USD remains high, former President Donald Trump harshly criticized Fed Chairman Jerome Powell, calling him “stupid”. Before the decision, Trump assessed that the Fed’s benchmark interest rate should be at least two percentage points lower to facilitate economic growth.
He also criticized that while Europe has cut interest rates 10 times, the United States has kept them the same, leading to a waste of national resources. Trump's comments came at a crucial time, easily adding to the volatility in the cryptocurrency market.
Economic data and Fed rate forecasts
The consumer price index (CPI) rose just 0.1% in May, bringing the annual inflation rate down to 2.4%. For now, the data is quite positive and close to the Fed’s 2% target, but policy remains cautiously assertive. Figures from the April Personal Consumption Expenditures report also showed a slowdown in growth.
However, Fed officials remain uncertain about the global implications of Trump’s trade policies and geopolitical tensions such as Iran-Israel. Chairman Powell asserted that, in the context of a strong economy and a good job market, it is appropriate to keep interest rates unchanged while uncertainties persist.
“The outlook will become clearer as the timing approaches, whether sooner or later. As long as the economy is stable and the labor market remains strong, we continue to believe that maintaining current policy is appropriate.”
Cryptocurrency market has not clearly reacted to Fed policy due to many external factors
While Fed policy remains a cap on market gains, global developments such as trade tensions, the threat of new tariffs, and geopolitical tensions between Iran and Israel are weighing on investor sentiment. On-chain indicators are also bearish, with wallet addresses showing a sharp decline in activity in a strong bear trend.
Source: IntoTheBlock
Bitcoin, often seen as a leading indicator for the entire cryptocurrency market, is likely to be negatively affected if major volatility occurs. Therefore, investors need to closely monitor developments in the coming time to clearly identify the trend of the killer trend.
In this context, the cryptocurrency market is still unclear, making investors cautious, waiting for clear signals from internal and external factors. The road ahead for Bitcoin is still full of challenges, as global factors and Fed policies continue to have a strong impact.
Source: https://tintucbitcoin.com/bitcoin-gan-105k-usd-co-dieu-chinh-khong/
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