Bitcoin holds $76.5K as Federal Reserve raises rates 25 basis points
In brief
- Bitcoin traded near $76,500 with 0.5% daily gains as US stocks gained 0.9% to 1.5%.
- Federal Reserve raised benchmark rates 25 basis points to 3.75-4% on Wednesday.
- CryptoQuant Bull Score Index fell to 60, signaling fading near-term momentum.
Market Rebound Follows Fed Action
US equities gained on the day as investors sought to capitalize on the local downside that followed policy tightening. The S&P 500 Index gained 0.9% while the tech-heavy Nasdaq Composite Index gained 1.5%, respectively. Bitcoin also enjoyed relief after falling to new month-to-date lows on Tuesday. At the time of writing, BTC/USD traded 0.5% higher on the day.
The rebound came after Bitcoin experienced a 25% rebound in August, though macro conditions are now presenting headwinds to sustained gains.
Momentum Signals Fade as Central Banks Tighten
Data from CoinGlass showed both bid and ask liquidity thickening around the current spot price, a typical feature of rangebound trading conditions. Data from TradingView showed that BTC price volatility was cooling over the last 24 hours, with only modest moves.
Analyst sentiment, however, reflects caution. CryptoQuant's Bull Score Index dropped from 80 to 60, the cut-off point for what it describes as bullish conditions. Julio Moreno, head of research at CryptoQuant, said the trend remains bullish but momentum and macro conditions are working against it near-term.
Central banks globally are tightening. The European Central Bank hiked rates by 0.25% last week and the Bank of Japan is expected to follow suit on Friday, adding pressure to risk assets broadly.
