Following the Fed meeting, Bitcoin [BTC] eased its two-day losing run. The US Federal Reserve kept interest rates constant on May 1st, as was predicted.
This is the sixth Fed meeting that the rate has been held between 5.25% and 5.50%. The Fed did point out that rate reductions are not appropriate until there is more assurance that inflation will reach 2%.
A portion of the Fed's policy declaration stated,
"Furthermore, the Committee's 2 percent inflation target has not been further advanced in recent months."
When questioned about whether there would be three rate reduction later in the year, Fed Chair Jerome Powell held a subsequent news conference. Powell answered back,
"The first quarter showed no improvement, so it seems like it will take more time to get to that point of confidence."
In summary, it appears that "the higher rates for longer" position is firmly back in place.
Memecoins led a brief rally while Bitcoin witnessed a slight decline.
Memecoins saw a modest uptick in value within an hour of the Fed rate announcement. Dogwifhat [WIF], Floki Inu [FLOKI], and Bonk [BONK] all had 6% recovery.
In the same time frame, there was a slight change in both Bitcoin and Ethereum [ETH].
Bitcoin has dropped sharply during the last two days, losing more than 12% of its value from a peak of $64.7K to a low of $56.5K. This highlighted a challenging Q2 and carried over Bitcoin's April losses into May.
BTC recovered $58K following the Fed's speech, but it fell again a few minutes later, indicating that there was still a lot of sale pressure.
Although there was a slight increase in ETH as well, as of this writing, it was rejected at the $3000 level.
The Fed's "higher for longer" policy and the negative flows from US Bitcoin ETFs make it intriguing to watch if Bitcoin can recover the range-low of $60.8K.
May 2024, Cryptoniteuae