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Why the price of cryptocurrencies could continue to rise even if the FED raises its rates?

By K1P | K1P_Cryptonews | 3 May 2023


When analyzing the price of Bitcoin over a long period, we see that it has fallen by around 1.8% in the last month. However, this still represents an increase of 69% since the beginning of the year.
So, while the price of Bitcoin still remains undecided, the financial world awaits with some doubts the last decision of the United States Federal Reserve (FED) on interest rates. The announcement is expected to take place this Wednesday and several analysts have already expressed concern over its possible ramifications for the crypto sector. According to CME's FedWatch analysis tool, the US central bank is expected to raise rates by 25 basis points. For Grayscale, the Fed's decision could not have as much negative impact as analysts expected.
In a report on Monday, the crypto analytics firm said cryptocurrency prices may still have the ability to benefit from rising interest rates. However, such a possibility will only be possible if events correspond to market expectations.
 
In its same report, Grayscale also gave its opinion on the volatility that has manifested itself in the crypto market in general, but especially at the level of Bitcoin in particular during the second half of April. According to the company's analysts, the study of this phenomenon has made it possible to retain several elements.
First, it should be noted that Bitcoin is still quite sensitive to a number of factors related to traders' feelings. Sentiments in turn can be easily influenced by the dissemination on social channels of incorrect or incomplete information. For some experts, this claim referred to a misleading alert coming from Arkham last week. The company also mentioned whales, stating that the perception of the actions of these large BTC holders could also have a significant impact on the value of the cryptocurrency.
Grayscale also specified that new factors such as a further rise in interest rates and a drop in inflation align with a bullish scenario for Bitcoin going forward.
As for the bankruptcies that several regional banks have experienced over the past few months, they simply demonstrate that investors continue to show an appetite for cryptocurrencies in times of economic uncertainty.
 

 

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