After the Federal Reserve's announcement of keeping interest rates unchanged at 4.25%-4.50%, Bitcoin displayed stable behavior, with no significant fluctuations.
Bitcoin's Reaction to Fed's Decision
The CME's FedWatch tool had already projected a 99.5% probability that the Fed would hold rates steady. Following the announcement, Bitcoin briefly dipped to $101,500 but quickly rebounded above $105,000 on January 30th. While traditional equities saw increased volatility, Bitcoin’s relatively stable response suggests that traders had already accounted for the Fed’s stance.
Santiment's Analysis
Santiment's latest analysis revealed that the cryptocurrency market has remained mostly unaffected despite these events. Historically, interest rate movements have influenced investor sentiment. However, Santiment suggests that Bitcoin and the broader crypto market may be displaying reduced sensitivity to these shifts as the sector matures. Notably, the most significant bull runs in crypto history have occurred during periods of minimal reliance on global equity markets.
Impact of U.S. Political Shift
Beyond the Fed’s decision, another major factor influencing Bitcoin’s trajectory has been the political shift in the United States. January has been a volatile month with markets experiencing sharp price swings. Donald Trump was sworn in as the 47th US president on January 20th, which brought renewed confidence to the crypto market due to his strong pro-Bitcoin stance. However, in the past week, Bitcoin has faced some significant pullbacks as the initial excitement surrounding Trump's presidency fades, and traders begin to assess the real impact of his pro-crypto policies.
Bitcoin's stability following the Fed's decision and political changes in the U.S. suggests a potential decoupling of cryptocurrencies from traditional financial markets, indicating a growing independence for digital assets.
