Bitcoin and Ethereum recover as interest rates remain unchanged in the US

Bitcoin It is Ethereum have recovered after starting yesterday morning almost 10% below where they were on Tuesday.

At the time of writing, the Bitcoin Price it is around US$57,700, after recovering 0.5% in the last 24 hours. And the Ethereum Priceafter rising 2.3% the previous day, it now trades for just under $3,000, according to CoinGecko data.

But the damage is still done. Per CoinGlassin the last 24 hours another US$193 million in crypto futures contracts were liquidated, increasing the US$300 million in settlements seen earlier this week.

Economist and trader Alex Krüger explained that this current cycle looks so different for traders because it is largely driven by interest in spot Bitcoin ETFs, which only began trading in January of this year.

“There has been almost no new retail coming into crypto,” he wrote in Twitter. “It has primarily been ETF buyers and participants from previous cycles redistributing and moving out of the risk curve.”

Analysts mainly attributed the drop in cryptocurrency prices to fear in the market about certainty among investors that the Federal Open Markets Committee – which sets monetary policy and controls US federal interest rates – would not lower rates. So the Fed did exactly what most investors thought it would do when keeping interest rates unchangedand cryptographic assets traded sideways.

During a press conference yesterday, Federal Reserve Chairman Jerome Powell told journalists that the fight to get inflation to 2% has been difficult, but added that he considered it “unlikely that the next change in the policy rate will be a hike.” .

“I would say it’s unlikely,” he said, but cautioned that “it will probably take longer for us to gain confidence that we are on a sustainable path to 2% inflation.”

But even President Joe Biden is optimistic that the Fed will still cut rates this year. “I stand by my prediction that before the end of the year there will be a rate cut,” he said during a news conference in Japan last month. “It could delay a month or so, I’m not sure about that.”

He was referring to the March inflation report hotter than expected which had just been released at the time.

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