Crypto markets have been pumping since the announcement of a 75 basis point interest rate hike in the United States, with experts explaining that markets may have initially been bracing for much worse.
On July 27, the price of Bitcoin (BTC) increased by around 8% to the mid mark of $22,500 following the decision of the Federal Open Markets Committee (FOMC) to raise interest rates once again. Many other major crypto assets also surged in price, with Ether (ETH), Polkadot (DOT), and Polygon (MATIC) all posting notable double-digit gains in the last 24 hours.
Quantum Economics founder and CEO Mati Greenspan jokingly questioned whether this was a “bullish rate hike” on Twitter on Wednesday.
Speaking with Cointelegraph, Greenspan noted that investors were clearly expecting worse and suggested that this latest bounce is nothing out of the ordinary.
“Markets love to raise Fed days, even when their decision is to be tough. Powell is particularly adept at delivering bad news. Clearly, investors expected worse.”
Markets had expected a larger increase. https://t.co/HkR8Upfi52
—Mati Greenspan (@MatiGreenspan) July 27, 2022
The Fed’s attempts to control inflation by raising interest rates are generally associated with a pullback in investment activity across markets.
However, there are mixed opinions among the community as to whether the latest pump will have enough momentum to sustain to the upside, or whether there is a significant pullback on the cards before the market starts to fully recover.
Can’t you see the price hovering between 19k and 23k during a downtrend and no signs of accumulation?
If you want to buy here, go ahead. So don’t sit back and cry if the market makes new lows, which is likely.
I’m not buying
— the Crypto Capo (@CryptoCapo_) July 27, 2022
Pav Hundal, an analyst at Australian crypto exchange Swyftx, told Cointelegraph that the company was “surprised by the exuberance of the reaction to yesterday’s rate hike” as the underlying macro picture still appears to be up in the air.
The Fed says one thing and the markets seem to hear another every time we see rate hikes. In June, it was the Fed that suggested that large rate hikes would be ‘rare’, this time Jay Powell hinted that the pace of the increase could ‘slow’.
“The best indicator of things to come is underlying economic data and, for now at least, it looks like some inflationary pressures are easing, with gasoline prices falling along with futures prices for commodities like corn and corn. wheat, as well as some shipping costs, he added.
Related: Ethereum Price ‘Cup and Handle’ Pattern Hints at Potential Breakout Against Bitcoin
Hundal went on to note that Swyftx saw a 100% increase in initial transactions around the news, indicating that “there are clearly a lot of people who see value in current market prices.”
The analyst stressed that a broader bullish or bearish trend likely won’t become apparent until the US releases important data related to its gross domestic product (GDP) performance in the coming days, which could indicate whether the country is officially in recession or not. :
“The good news is that we won’t have to wait too long to see what happens to the crypto market when the initial volatility wears off. The United States is about to release its GDP data and that will be a major stress test. Any negative sentiment here could wipe out recent gains.”
“But if the macro picture starts to show signs of resilience, we could see the crypto market capitalization stabilize at the $1 trillion point and recover from there,” he added.
This post ‘Bull Rate Hike’: Why Crypto Soared Today in the Face of Bad News
was published first on https://cointelegraph.com/news/bullish-rate-hike-why-crypto-spiked-today-in-the-face-of-bad-news