The BTCUSD pair fell by 0.40% to $36,809 on Wednesday, January 26. During the North American trading session, price action recovered to $38,920 right after the Federal Reserve's rate decision was announced. The US central bank left interest rates unchanged in the range of 0.0%-0.25%. The Fed signaled that it will start raising interest rates soon and then reduce its UST holdings. Thus, the regulator is set to raise rates in March. Balance sheet runoff is expected to begin immediately after the rate hikes.
The market turned jittery during Fed Chair Powell's post-meeting press conference. Powell's attempts to explain the policy outlook pushed UST yields higher, triggered a sell-off in equities, cryptocurrencies, and a rally in the dollar.
The Fed's statement did not satisfy those who called for maximum policy flexibility. It also raised concerns among those who worry that the Fed is behind the curve in terms of economic reality and may well be forced into excessive rate hikes later this year.
Buyers surrendered the entire day's profits after Powell's speech, tracking equity benchmarks lower. S&P 500 futures dropped 4%, and Bitcoin shed 8.7%, including today's APAC trading. Stock indices rose in European trading, and cryptocurrencies have also been on an upward trajectory. By the time of writing, the BTCUSD pair was trading at $36,704. Heightened volatility is expected at 13:30 GMT following the release of US 4Q GDP. A strong reading will exert a positive impact on stock indices and Bitcoin.