Researchers from the cryptocurrency analysis firm MarktQuant have disclosed a relatively unknown factor affecting Bitcoin's value.

MarktQuant discovered a strong correlation between the Federal Reserve's (Fed) increase in the Reverse Repo (RRP) interest rate and the subsequent decline in Bitcoin's price.

According to MarktQuant, whenever the Fed raises the RRP rate on a quarterly basis, Bitcoin's price tends to fall sharply, with the full impact usually seen about 18.2 days later.

Their data indicates that the average delay for this price drop is 18.2 days, with a standard deviation of 7.7 days, giving traders a window to adjust their strategies.

"Fed’s RRP rate hikes consistently cause a drop in BTC price," the report highlighted. "Increased trading volumes during this period suggest a surge in selling pressure."

The Reverse Repo program allows financial institutions to park excess reserves with the Fed in exchange for collateral, reducing liquidity in the financial system. This tightening of liquidity often has a noticeable effect on the cryptocurrency market, particularly on Bitcoin.

MarktQuant stressed the importance of monitoring the Fed’s RRP actions, advising that understanding the lag between liquidity constraints and Bitcoin's reaction can help investors improve their risk management and portfolio strategies.