BTC Holds Near $76.5K While US Equities Rally Following Federal Reserve Rate Increase
The leading cryptocurrency registered moderate gains for the day as American stock markets experienced positive momentum in the wake of the Federal Reserve's initial rate increase since July 2023.
The price of Bitcoin (BTC) hovered around the $76,500 mark following the opening bell on Wall Street Thursday, as market participants purchased US equities after their recent decline.
Key points:
- The cryptocurrency entered a consolidation phase following a dip beneath the $76,000 level, which came after the Federal Reserve implemented a 0.25% rate increase.
- American stock indices experienced a rebound, with the tech-focused Nasdaq Composite Index climbing 1.5% as technical analysis indicated further upward movement.
- Technical evaluation of Bitcoin pricing maintained an optimistic perspective on market dynamics, with CryptoQuant's Bull Score Index hovering around 60/100 during Thursday's session.
Bitcoin halts losses as US stocks turn green
Information from TradingView indicated that price fluctuations for BTC were diminishing throughout the previous 24-hour period, with only minor movements occurring to capture liquidity in the immediate vicinity.
Statistics from CoinGlass revealed that liquidity on both the bid and ask sides was building up in the area surrounding the present spot price, which represents a characteristic pattern of trading within a defined range.
American equity markets posted gains throughout the trading day, as market participants looked to take advantage of the recent pullback that occurred in response to monetary policy tightening from the Federal Reserve. The benchmark S&P 500 Index along with the technology-weighted Nasdaq Composite Index advanced by 0.9% and 1.5%, respectively.
During Wednesday's session, the Federal Reserve decided to raise its benchmark interest rates by 25 basis points, bringing them to a range of 3.75-4%. The move represented the central bank's first rate hike since July 2023, marking the conclusion of a three-year period of accommodative policy during which the Fed either reduced rates or maintained them within the same bracket between policy meetings.
In commentary on the situation, trading resource The Kobeissi Letter indicated that financial assets would likely maintain strong performance despite the likelihood of reduced liquidity conditions that typically accompany rate increases. As previously covered by Cointelegraph, interest rates set by central banks are moving higher on a global scale, with the European Central Bank implementing a 0.25% increase during the previous week and the Bank of Japan anticipated to take similar action on Friday.
"The asset owner economy just keeps getting better," it wrote in a post on X, referencing the day's gains in the Nasdaq.
Analysis sees BTC price trend "cooling, not turning"
The flagship cryptocurrency also experienced a reprieve following its descent to fresh month-to-date lows during Tuesday's trading session. As of the current writing, the BTC/USD pair was trading 0.5% higher compared to the previous day.
In their assessment of the present market environment, blockchain analytics platform CryptoQuant characterized macroeconomic conditions as an obstacle to the extension of Bitcoin's prior rally that accumulated gains of 25% throughout August.
"The trend is still bullish, but momentum and macro are working against it near-term," head of research Julio Moreno wrote in its latest weekly report sent to Cointelegraph.
Moreno highlighted that one of CryptoQuant's proprietary metrics designed to monitor BTC price cycles, known as the Bull Score Index, had declined from the 80 level to 60 — representing the threshold for what the platform characterizes as "bullish conditions."
"Bitcoin is cooling, not turning. A Bull Score of 60 keeps the trend bullish, but fading US demand, rising altcoin inflows, and a week of macro risk — the delay of the CLARITY Act and a likely Fed hike — argue for consolidation. Watch $70K and $62K–$65K as support," the report summarized.
