- The FED announced another rate hike increase on Wednesday.
- The US enters a “technical” recession.
- Yet, Bitcoin’s price is holding at the $23k mark, up 2.65% in the last 24 hours.
The crypto market was expected to be shaky this week, especially after the US entered recession and the US Federal Reserves raised interest rates by 0.75% on Wednesday.
The Federal Reserve announced on Wednesday another increase of its interest rate in an effort to fight inflation. According to the government’s press release, the unemployment rate has remained low in recent months. However, the elevated inflation has caused imbalances in supply and demand in relation to the pandemic.
In addition, soaring prices of food, energy, and broader price pressures in relation to the ongoing war against Ukraine contributes to the “additional upward pressure on inflation and are weighing on global economic activity.” As a result, the committee decided to increase interest rate hikes by 75 basis points, the fourth increase since the beginning of the year.
Price charts showed that Bitcoin dropped by at least 10% or more after the previous three FED meetings in March, May, and June. Experts were looking at a new volatility followed by this week’s rate increase.
However, the price of Bitcoin and other coins pumped shortly after the rate hike was announced and still holding its position two days after the rate hike announcement.
According to a tweet from crypto investor Lark Davis, the US economy shrunk by 0.9% in this year’s second quarter. Technically, the US entered recession, but the National Bureau of Economic Research (NBER) said the US is not in recession. Adding that this must be a transitory recession.
Despite the uncertainty, the price of Bitcoin is increasing slowly. At the time of writing, Bitcoin is trading at $23,969.93, up 2.65% in the last 24 hours according to CoinMarketCap.
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