Heavy Bitcoin Buying In Store Among Whales After Fed Rate Hike?
In the wake of double macro announcements, Fed interest rate hike and GDP figures, cryptocurrency market hardly had any impact. After the Fed announced a 0.75% interest rate increase on Wednesday, Bitcoin jumped around 4%. However, the GDP numbers had less impact with Bitcoin dropping less than 1% after the announcement. Negative GDP growth for the second consecutive time led to speculation of possibility of a recession situation.
Several U.S. officials have been stating that the economy is not in a state of recession although the scenario technically qualifies for the same.
Fed Interest Rate Hike Spurring Bitcoin (BTC) Accumulation?
Meanwhile, data shows small scale Bitcoin holders are increasingly inclined to accumulating more of the asset. There seems to be a clear pattern in Bitcoin buying among long term holders. Since the Fed interest rate decision, there was a sharp rise in Bitcoin buying among whales with lesser holdings. As per on-chain data, holders with BTC between 1,000 to 10,000 Bitcoin began accumulating after the Fed announcement. According to CryptoQuant analysis, the recent accumulation of stablecoins on exchanges was in preparation for BTC accumulation.
“After yesterday’s Fed interest rate decision, the big guys with 1k-10k BTC wallets start increasing their reserves. This may explain the 26 July huge stablecoin depositing transactions into the exchanges.”
Accordingly, Bitcoin price rose around 4% after the Fed announced its decision. As of writing, Bitcoin (BTC) is trading $23,085, up 7.57% in the last 24 hours, according to CoinMarketCap. And Ethereum (ETH) is trading at $1,645, up 10.50% in the last 24 hours.
Doubts Over Crypto Rally
Even if there would be a crypto market rally in the long term thanks to the Fed announcement, it could not be sustainable, experts believe. Alfonso Peccatiello, an influencer, expressed doubts over the crypto rally. It was Fed chair Powell’s speech that resulted in the crypto rally, he believed. “The crypto market didn’t start to rally well until Powell’s declaration that inflation levels are broadly in line with neutral interest rates.”
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