Market update: Share price recovery after Fed decision
Following the decision of the US central bank (Fed) to keep interest rates at 4.5 percent, a revival is visible on the crypto market.
Following the decision of the US central bank (Fed) to keep interest rates at 4.5 percent, a revival is visible on the crypto market. Bitcoin (BTC) temporarily shot up above $87,400, but then fell back slightly and is now hovering just below $86,000. This represents an increase of more than 3 percent in the past 24 hours.
Ethereum (ETH) and Solana (SOL) also benefited from the positive sentiment, rising 4 percent and 6 percent respectively. In general, price gains in the altcoin market were limited to a few percent. An exception is Fartcoin, which made a spectacular comeback with an increase of more than 27 percent.
In addition, XRP received a significant boost of 7 percent after the US Securities and Exchange Commission (SEC) dropped the lawsuit against Ripple.
Powell calms the markets
During the press conference after the interest rate meeting, Fed Chairman Jerome Powell said that inflation is closer to the Fed's target. At the same time, he warned that tariffs imposed by former President Donald Trump could lead to price increases, which could slow the further cooling of inflation.
Nevertheless, Powell expects that the impact of these tariffs will be temporary. The Fed maintains its expectation that there will be two more interest rate cuts before the end of the year.
The market responded positively to this clarity. Investors on Wall Street had some doubts whether the Fed would stay the course amid trade disputes stoked by Trump. Now that uncertainty has been removed, a recovery rally started. Risky assets such as Bitcoin in particular benefited, while Nasdaq futures also rose 0.5 percent.
Expectations for the coming months
According to the CME FedWatch Tool, the chance of a rate cut in May is 16 percent, based on the implicit expectations from futures contracts.Furthermore, the Fed has announced that it will reduce the pace of Quantitative Tightening (QT). From April, the monthly reduction of government bonds will be scaled back from $25 billion to $5 billion.
Venture capitalist Chris Burniske sees positive signs for Bitcoin: “Yesterday's close was important for $BTC as it convincingly broke through the 20-day and 200-day Simple Moving Average (SMA). Now the question is whether we can hold this level. We're not there yet, but I like what I see.”
Meanwhile Trump calls on the Fed to cut interest rates on his social media platform Truth Social:
On Thursday, Trump will address the crypto community at the Blockworks Digital Asset Summit in New York. Today, traditional investors are primarily looking forward to the release of data on unemployment claims and existing home sales.
