- US Fed left interest rate unchanged again, citing “lack of further progress” on 2% inflation target.
- BTC remains under pressure despite a modest flip after the Fed meeting.
Bitcoin [BTC] eased its two-day bleeding streak after the Fed meeting. As expected, the US Federal Reserve left interest rates unchanged on 1st May.
This marks the sixth Fed meeting at which the agency kept the rate at 5.25% – 5.50%. However, the Fed noted that rate cuts are not appropriate until there is greater confidence that inflation is heading to 2%.
Part of the Fed’s policy statement read,
“In recent months, there has been a lack of further progress toward the Committee’s 2 percent inflation objective.”
In a later press conference, Fed chair Jerome Powell was asked whether there would be three rate cuts later in the year. To which Powell responded,
“We didn’t see progress in the first quarter; it appears then that it’s going to take longer to reach that level of confidence.”
In a nutshell, “the higher rates for longer” stance seems officially back.
Bitcoin saw a modest flip as memecoins led a short recovery
Within an hour after the Fed rate decision, memecoins led a slight recovery. Bonk [BONK], Floki Inu [FLOKI], and dogwifhat [WIF] recovered by 6%.
BTC and Ethereum [ETH] recorded a modest flip within the same period.
In the past two days, BTC has slumped hard, shedding over 12% from a high of $64.7K to a low of $56.5K. This extended BTC’s April losses into May and underscored a tough Q2.
After the Fed statement, BTC reclaimed $58K but dropped lower a few minutes later, denoting that it was still under immense sell pressure.
ETH also saw a modest uptick but faced rejection at the $3000 level at the time of writing.
With the Fed’s “higher for longer” stance and negative flows from US BTC ETFs, it will be interesting to see if BTC could reclaim the range-low around $60.8K.
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