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Crypto Potato 2025-01-30 12:47:06

Bitcoin Shrugs Off Fed’s Rate Decision: Is Crypto Decoupling From Stocks?

After the Federal Open Market Committee (FOMC) announced that interest rates would remain unchanged at 4.25%-4.50%, Bitcoin’s price showed no significant fluctuations. 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. Interestingly, a new report indicates that BTC is “hanging in there.” Bitcoin Defies Equity Volatility Santiment’s latest analysis revealed that the cryptocurrency market has remained mostly unaffected despite these events. Historically, interest rate movements have influenced investor sentiment across all financial sectors, particularly following the aggressive rate cuts in 2020 and subsequent hikes in 2022. Over the past five years, lower rates have been associated with bullish trends. On the other hand, rate hikes have typically triggered bearish movements. 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, the on-chain analytic platform stated in its update. While cryptocurrencies have remained closely correlated with traditional stocks over the past three years, their current stability amid the Fed’s latest decision suggests they are evolving beyond the narrative of being merely “high-leverage tech stocks.” As such, this divergence could be indicative of a growing independence for digital assets. “But today is a good sign that cryptocurrencies aren’t entirely fluctuating as simply ‘high leveraged tech stocks’, as many skeptics have been claiming.” “True Test of Pro-Crypto Presidency” 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. His administration has already outlined plans to position the US as a global leader in blockchain technology and establish a national Bitcoin reserve. Santiment attributed Bitcoin’s rally since November 5th to his election win, with the cryptocurrency hitting record highs both in November and again on January 20. 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. The post Bitcoin Shrugs Off Fed’s Rate Decision: Is Crypto Decoupling From Stocks? appeared first on CryptoPotato .

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