Bitcoin price recovery anticipated by analysts following unchanged rates by the Fed

Bitcoin’s price experienced a recovery on May 2nd following the decision by the United States Federal Reserve to keep interest rates unchanged. This decision dampened investors’ hopes for rate cuts in 2024. The Federal Open Market Committee (FOMC) minutes, released on May 1st, stated that interest rates would remain at 5.25%–5.50%. The Fed also mentioned that it would require greater confidence in inflation moving towards 2% before considering rate cuts. Additionally, the Fed revealed plans to slow down the pace of its balance sheet reductions, going from $60 billion per month to $25 billion per month. Market analyst Fejau pointed out that the FOMC press release sent mixed signals, appearing dovish on the balance sheet but hawkish on rate cuts. However, despite this, the FOMC decision seemed to increase risk appetite and asset prices. Bitcoin’s price began to rebound shortly after the news, rising over 3% in the last 24 hours to trade at $59,077 at the time of writing. The price of Bitcoin reached as high as $59,482 on May 2nd, leaving market participants wondering if the downward trend is over. Notably, the recent price drop marked the lowest level for Bitcoin in two months, with a 6.7% decrease from its price at the halving. Rekt Capital, a popular trader and analyst, noted that Bitcoin’s current price action follows a similar trend to the one observed after the 2016 halving event. Following the 2016 halving, there were additional corrections of up to 17% that lasted as long as three weeks. Rekt Capital stated that the current deviation is -6% so far, suggesting that Bitcoin’s price could potentially dip further as the standard cycle phenomena continue to play out. On-chain metrics also provide valuable insights into Bitcoin’s recovery. The Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio, which compares the current market value to the average price at which coins were last moved, currently stands at -6%. This negative range indicates that markets bounce back most effectively. Another metric indicating a potential market bounce in the short term is the ratio of BTC transactions moving at a loss compared to those moving at a profit. Santiment’s data shows that the ratio of BTC being moved at a loss is higher than those being moved at a profit. It’s important to note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any decisions.