The Federal Reserve’s interest rate decisions have become make-or-break moments for crypto markets. Since 2022, when the Fed started aggressively hiking rates to combat runaway inflation, digital assets have mirrored the volatility in traditional markets.
Santiment’s latest analysis suggests this correlation isn’t fading soon; if anything, it is becoming the new normal.
Interest Rates and Market Reactions
According to the analytics platform, each Federal Open Market Committee (FOMC) meeting tends to generate huge market reactions. In 2022, when rates climbed from near-zero to 4.50% by December, both crypto and equity markets experienced notable declines, with inflation peaking at 9.1%.
Santiment’s data suggest that traders often act preemptively, leading to heightened volatility in the days leading to an FOMC announcement. The platform analyzed several instances of FOMC decisions and Bitcoin’s corresponding price movements, revealing a recurring pattern: the asset’s price t
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