Crypto Markets Bounce After Fed Leaves Interest Rates Unchanged

Crypto markets rebounded on Thursday following the Fed’s decision to hold rates steady.

Bitcoin (BTC), the world’s largest cryptocurrency, is trading at around $59,000, marking a 4% recovery in the past 24 hours. Ethereum (ETH) is up 3.8%, while Solana (SOL) has soared by 12%, according to CoinGecko data.

More than $100 million of short positions were liquidated in the past 24 hours, according to CoinGlass.

Fed Chair Jerome Powell told reporters during a press conference on Wednesday that achieving the 2% inflation target has been difficult. He also said that "it is unlikely that the next policy rate move will be a hike.”

Analysts at cryptocurrency exchange Bitfinex say Bitcoin could trade sideways following the halving. "Consequently, we believe we could see a 1-2 month consolidation in Bitcoin prices, trading in a range with swings of $10,000 on either side,” they said.

Bitcoin ETFs bleed

Yesterday, U.S. spot Bitcoin ETFs saw net outflows of $563.7 million across 11 ETFs.

This marks the largest single-day outflow since the ETFs commenced trading on January 11. Since April 24, investors have withdrawn nearly $1.2 billion from the ETFs, data from Farside shows.

Fidelity’s FBTC led the pack with $191.1 million in withdrawals, followed closely by GBTC with $167.4 million. ARKB and IBIT saw outflows of $98.1 million and $36.9 million, respectively.

Stock markets turn green

Stock futures advanced on Thursday as investors looked ahead to more corporate earnings and key labor data later in the week.

Dow Jones Industrial Average futures marked a 0.45% increase, while S&P 500 futures climbed 0.7% and Nasdaq 100 futures increased by 1%.

Investors will watch Thursday for economic data on weekly jobless claims, first-quarter worker productivity and unit labor costs, and March figures on the trade deficit and factory orders. Those releases all come ahead of Friday’s April jobs report.

Youwei Yang, Chief Economist at BIT Mining, in a note shared with The Defiant, said he noticed an initial bullish response due to what was perceived as dovish actions from the FOMC.

Looking ahead, he expects “the next 3-4 months will be less bullish and more risk-oriented, with the market closely monitoring inflation, employment, and economic data for any unexpected shocks or to gain confidence about potential rate cuts."