“No Relief Rally”... Bitcoin, Ethereum ‘Shake’ Despite Interest Rate Freeze

▲ Bitcoin (BTC), Ethereum (ETH)

Bitcoin (BTC) and Ethereum (ETH) showed a downward trend after the US Federal Reserve's (Fed) decision to freeze interest rates, once again reacting sensitively to macroeconomic variables.

Cryptocurrency specialized media Decrypt reported in a recent article that major virtual asset prices showed weakness amidst continued market uncertainty as the Fed froze its benchmark interest rate for three consecutive times. The Fed maintained a cautious monetary policy stance, keeping interest rates in the range of 3.50% to 3.75%.

While this decision was not significantly different from market expectations, the fact that inflation still exceeded the target acted as a factor pressuring investor sentiment. The Fed maintained its stance to continue data-driven policy decisions until the inflation rate stably reaches the target level.

Bitcoin and Ethereum expanded their volatility in this macroeconomic environment. Despite the interest rate freeze, the market focused more on the sustainability of tightening than on expectations of increased liquidity, which is analyzed to have created selling pressure across risk assets. In particular, concerns that rising energy prices and geopolitical tensions could stimulate inflation dampened investor sentiment.

The continued divergence of opinions within the Federal Open Market Committee (FOMC) regarding the policy direction is also pointed out as a factor increasing market uncertainty. While some members raised the need for interest rate cuts, the majority favored maintaining the current level, opting for a 'wait-and-see stance'.

Ultimately, the virtual asset market is assessed to have entered a phase where it is more significantly influenced by future monetary policy paths and macroeconomic trends than by short-term events like interest rate freezes. Investors are closely monitoring the timing of interest rate cuts and inflation trends to gauge the direction of Bitcoin and Ethereum.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*