Briefly-
- Federal Reserve officials decided not to change interest rates following a unanimous vote.
- Nevertheless, regulators predict three rate surges in 2022
- Bitcoin and other coins bounced as Fed’s decision triggered the bullish sentiment.
The United States Fed Reserve officials have decided not to change interest rates. That came after a unified vote as the two-day meeting ended on 15 December. Bitcoin price has gained more than 6%, with bullish sentiment in the cryptocurrency universe.
Fed Targets Near-Zero Interest Rates
The US policymakers Federal Reserve decided to lead interest rates unbothered, maintaining them in the 0% – 0.25% range. According to an announcement by the officials, Fed plans to keep near-zero rates until achieving full employment.
Jerome Powell, Fed Chairman, said that it is still uncertain how long labor market scarcities will last. He confirmed that the United States economy made rapid progress towards full employment, but labor scarcities might continue if another coronavirus wave emerges.
Meanwhile, the central bank doubled the bond buy tapering pace by $30B per month. According to reports by CNBC, the Fed declared its commitment, using all available tools to support the United States economic recovery.
The Federal Reserve will purchase bonds worth $60 billion from 2022 January. Moreover, it expects the bond-purchasing program to end by March of next year. Officials predict three rate increases in the next year and another three in 2023. Powell confirmed that Fed wouldn’t raise rates until tapering is over.
BTC Price Finds Crucial Foothold
Top digital coins by market cap, BTC, and ETH responded positively to the Fed’s update. Bitcoin rose past $49,000 after the policymaker announced its decision. The upward move had the crypto recovering within no time, securing a crucial foothold beyond $48,501. The 38.2% FIB retracement area and 50 4Hr SMA meet at this level.
If buy orders increase, BTC price might rally higher to tag the 4hr chart’s falling wedge pattern’s top boundary at $49,901. Overcoming this area might lead to the 12% upswing, projected by the prevailing chart pattern, taking BTC to $55,435.
However, selling momentum increase will see BTC testing vital support. Failure to maintain it will mean a downward trip to 21 4hr MA near $47,929.
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