Bitcoin Defies Expectations in Face of Rate Hike
Bitcoin's price has been steadily increasing despite the Federal Reserve's recent rate hike. The token reclaimed the $80,000 area within days of the decision, defying expectations that higher rates would boost the dollar and tighten liquidity, making it harder for risk assets like Bitcoin to grow.
The Fed's 25 basis point hike was widely anticipated, with futures markets assigning a 93% probability to the move hours before the announcement. This reduced the shock value of the actual decision, allowing for a relief bounce as short sellers covered their positions.
On-chain data shows that spot trading volume fell during the bounce, while ETF volumes dropped alongside it, a pattern typically associated with short covering rather than fresh capital inflows. Bitcoin's rally has also tracked closely with global M2 money supply growth, suggesting the move reflects easier underlying liquidity rather than a structural break from dollar-driven markets.