Will Bitcoin price face negative effects from Federal Reserve’s two rate hikes?

Bitcoin price is still stuck in a rangebound movement for the eleventh day with no directional bias in sight.
Altcoins have seized the opportunity, rallying massively over the past few days.
The US Federal Reserve's upcoming rate hikes could have an impact on BTC, albeit short-lived.

Bitcoin (BTC) price continues to move sideways for the eleventh day, confusing short-term traders. Despite the Exchange Traded Fund (ETF) mania, the big crypto continues to remain lull.

Unexpectedly, altcoins seem to be enjoying the enhanced interest in crypto due to the ETF hype. Bitcoin Cash has risen a whopping 212% in 10 days, STORJ has climbed 67% in the last two weeks, and many other altcoins have also skyrocketed.

But will this altcoin mania continue? Unlikely, especially if Bitcoin price finds its footing and kickstarts a rally, irrespective of the direction.

Also read: Top 3 altcoins to buy for next alt season: PEPE, OP, BNB

Adding Fed’s decision to the mix

Last year proved that the United States Federal Reserve’s monetary policy decision does affect Bitcoin and the larger crypto markets. But this connection between the Fed’s decision, the stock market and the cryptocurrency market seems to have dried up.

However, worsening macroeconomic conditions and erosion of trust in the US banking system has clearly given Bitcoin the upper hand, knocking the aforementioned correlation down. As a result, Bitcoin price has returned year-to-date gains of nearly 85%.

But Fed Chairman Jerome Powell is hinting at two more rate hikes by the end of 2023. If Powell follows through on his commitments, the US Dollar could see a massive rally, causing risk-on assets like the stock markets or Bitcoin to take a hit.

Will Bitcoin price tank because of the rate hikes?

The effects of these rate hikes on Bitcoin price are usually ephemeral or short-lived. In addition to the rate hikes, if the correlation between BTC and the stock market remains low, Bitcoin price will continue to move depending on supply and demand dynamics, aka capital flow.

From a big-picture perspective, Bitcoin price remains bullish and can scale to highs last seen in late 2021.

Like this article? Help us with some feedback by answering this survey:

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.