Although the Federal Reserve did not cut interest rates, the price of Bitcoin responded well after the meeting, rising to multi-week highs above $87,500, as it faced some resistance.
Several altcoins also performed well, led by XRP after Ripple won the legal case against the U.S. Securities and Exchange Commission.
Bitcoin price exceeds $85K
Last week wasn’t good for the largest cryptocurrency, but it managed to regain some of its strength by the weekend, quietly settling at around $84,000. After some volatility on Sunday due to large short positions on Hyperliquid, the asset was rejected at $85,000 at the start of the current business week, falling to $81,200 on Tuesday.
However, it had recovered two thousand dollars by Wednesday in anticipation of the second FOMC meeting of the year. Once that happened, and with growing awareness that the US Federal Reserve would not change key interest rates, Bitcoin (BTC) reacted with immediate volatility, rising and falling by $1,000.
In the end, the cryptocurrency rose in the following hours and reached $87,500 for the first time since March 7. It hasn’t stayed on track, and is now below $86,000, but it’s still up 2.5% on the day.
US bitcoin exchange-traded funds (ETFs) recorded inflows for the third consecutive day this week, suggesting lower selling pressure. Volatility in the cryptocurrency markets reflects a broader perspective, embodying both opportunities and risks.
Its market capitalization rose to $1.7 trillion on the CG platform, while its dominance of altcoins was slightly damaged, falling to 58.4%.
Cautious in cryptocurrency market amid inflationary concerns
With inflationary concerns continuing to dominate financial markets, recent comments from analysts point to a more cautious outlook on crypto investments.
Crypto traders are watching the Fed’s current interest rate policies closely, especially in light of the potential rate cuts hinted at by Fed Chairman Jerome Powell.
Nigel Green, CEO of the Dever Group, stated in a note published on the Cointag website: “The idea that inflationary pressures are rapidly receding under these conditions is at best an illusion”.
Bitcoin shows resilience amid divergent market indices
In the current financial environment, the Bitcoin market has shown surprising resilience. On one recent trading day, the price of Bitcoin rose 1.8%, reaching $85,208 at the time of writing. During intraday trading, it briefly breached the $86,000 mark before retreating slightly. Despite this rise, the price of Bitcoin remains 11% lower than its price a month ago, suggesting a potential recovery that is still hampered by external economic factors. The Fed Impact and Inflation Expectations
Market participants’ reactions following the Federal Reserve’s interest rate decision suggest a complex relationship between cryptocurrency values and traditional economic indicators. While traders initially welcomed Powell’s comments, citing possible future rate cuts, analysts such as Nigel Green argue that the long-term effects of tariffs imposed during the previous administration could hamper the expected economic recovery. Green stressed that these protectionist measures could lead to higher labor costs, ultimately maintaining inflationary pressures.
US President Trump’s speech at the Block chain works Digital Assets Summit is a historic event, as it is the first time that a sitting president has spoken at a cryptocurrency conference, signaling growing recognition of the industry at the highest levels.
The landscape of ETFs remains dynamic
Trading activity surrounding Bitcoin and Ethereum ETFs shows a mixed but revealing picture. Data shows that Bitcoin and Ethereum ETFs saw $11.8 million in inflows, while Ethereum ETFs faced $11.7 million in outflows, continuing a divergent trend in interests between the two leading cryptocurrencies. Analyst Valentin Fournier of BRN notedto continued trading activity, despite low flow rate, indicating that market engagement remains strong despite volatility.
Solana grabs attention with launch of new ETFs
As the broader ETF landscape evolves, Solana has recently received positive attention following the imminent launch of two ETFs. Both Volatility Shares Solana, which tracks Solana futures, and a leveraged trading variant under the symbol SOLT are expected to provide , new opportunities for investors. The development comes at a time when Solana’s price hit a recent high of $136.09, before pulling back slightly, suggesting investors’ continued interest in altcoins..
Market sentiment and outlook
Current sentiment among investors appears cautiously optimistic, rooted in the hope that the Fed’s policies may eventually stabilize. However, statements by analysts such as Green highlight the importance of being cautious about external economic pressures, which may affect future market dynamics. Volatility in cryptocurrency markets reflects a broader perspective, embodying both opportunities and risks.
While Bitcoin and Ethereum face a challenging economic environment characterized by inflation concerns and interest rate fluctuations, the market remains active. Solana’s upcoming ETFs launches are likely to reshape investor strategies and lead to increased liquidity in the altcoin sector. As the cryptocurrency market continues to adapt to these conditions, it is essential that investors remain informed and quick in making their decisions.
