Bitcoin’s price recovered on May 2 after the United States Federal Reserve opted to keep interest rates unchanged, disappointing investors hoping for rate cuts in 2024. The Federal Open Market Committee (FOMC) minutes released on May 1 stated that interest rates would remain at 5.25%–5.50% until there is greater confidence in inflation reaching 2%. Additionally, the Fed revealed plans to reduce the pace of its balance sheet reductions from $60 billion per month to $25 billion per month. Market analyst Fejau noted that the FOMC press release sent mixed signals, appearing dovish on the balance sheet but hawkish on rate cuts. Nevertheless, the FOMC decision seemed to boost risk appetite and asset prices, with Bitcoin’s price rising over 3% in the last 24 hours to trade at $59,077 at the time of publication. Bitcoin’s price reached as high as $59,482 on May 2, leaving market participants wondering if the downtrend is over. Analyst Rekt Capital compared the recent price drop to the trend following the 2016 Bitcoin halving and suggested that further dips may be possible. On-chain metrics also provide insights into Bitcoin’s recovery. The Short-Term Holder Market Value to Realized Value (STH-MVRV) ratio currently stands at -6%, indicating an effective market bounce, according to Santiment. Additionally, the ratio of daily BTC transactions in profit versus loss suggests a potential market bounce in the short term. As always, readers should conduct their own research and exercise caution when making investment decisions.
Bitcoin price recovery anticipated by analysts following the Federal Reserve's decision to maintain unchanged interest rates.