Bitcoin price whipsaws as Fed says rate hikes may not be ‘appropriate’

Bitcoin

Bitcoin (BTC) saw heavy volatility on March 22 as the United States Federal Reserve hinted that it may stop interest rate hikes.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Powell on rates: “‘May’ and ‘some’ instead of ‘ongoing'”

Data from Cointelegraph Markets Pro and TradingView showed sharp moves both up and down for BTC/USD as the Fed hiked by an anticipated 25 basis points.

During an ongoing press conference, Fed Chair Jerome Powell appeared to play down the ongoing U.S. banking crisis and its aftermath, while hinting that the day’s interest rate hike may be the last.

Powell said in prepared remarks the Fed believes that “events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes.”

“It is too soon to determine the extent of these effects, and therefore too soon to tell how monetary policy should respond,” he stated.

“As a result, we no longer state, that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate.”

BTC/USD initially saw local lows of $27,867 on Bitstamp around the events before returning to trade above $28,000, only to continue falling at the time of writing as markets continued to digest Powell’s responses to press queries.

On rate hikes specifically, he said that the terms “may” and “some” as opposed to “ongoing” would be best to describe future policy.

Reacting, some commentators nonetheless described Powell’s Fed as “hawkish” in placing inflation above the banking crisis by continuing hiking.

“The Fed have shown thus far, that they are committed to rates higher for longer + inflation as enemy #1,” Tedtalksmacro wrote in part of Twitter follow-up.

BTC price comes full circle

Bitcoin thus did not deliver the trip to $30,000 which some had hoped for in the run-up to the rate hike decision.

Related: Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

“Shorts liquidated then longs liquidated. Back to the same price we were an hour ago,” analyst Matthew Hyland summarized.

Data from monitoring resource Coinglass put the total crypto liquidations for the day at $36 million and $78 million for shorts and longs, respectively.

Crypto liquidations chart. Source: Coinglass

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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