Bitcoin saw more volatility on Wednesday following a Federal Open Markets Committee meeting, during which the U.S. central bank agreed to raise its benchmark interest rate by 0.5%.
The announcement, which aligned with market expectations, signals the Fed’s first movement this year to slow the hawkish momentum of monetary policy.
As the Federal Reserve unveiled its decision at 14:00 EDT, Bitcoin immediately fell from $18,300 to $17,850 within five minutes.
The asset reversed course shortly after, trading for $17,960 at writing time.
According to data from CoinGlass, the crypto market move has contributed to $44 million in liquidations within the past 24 hours, most of which came from Bitcoin trades.
The largest single liquidation was for an ETH-BUSD trade on Binance for $1.04 million
Going into the meeting, the market priced in a roughly 80% chance of a 50 basis point rise, with a 20% likelihood of a fifth 75-point rise, according to the CME’s FedWatch tool. With the prior ringing true, the central bank’s target rate lies between 4.25% and 4.5%.
The Fed has raised rates throughout 2022 in an effort to combat record-high CPI inflation. With November’s inflation numbers showing signs that their efforts are working, market participants expect the hikes to slow heading into 2023.
Numerous other central banks appear to be reeling in rates as well. The Bank of Canada announced a 50 basis point hike back in October, with the Bank of England following suit in September.
The United Nations has pressured the Federal Reserve to reverse course on its interest rate boosts for months, citing risks of a potential global recession. Indeed, many crypto industry companies have already been forced to enact mass layoffs this year, often in response to macroeconomic concerns.
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