• A look at what to expect if the Federal Reserve announces a rate hike.
• Why the impact of the announcement will likely not trigger a major pullback.

Bitcoin’s [BTC] downside potential just got elevated based on recent statements by the Federal Reserve Chairman Jerome Powell. The FED is reportedly planning to raise interest rates, an outcome that could place more pressure on the crypto and stock markets.

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Bitcoin’s historic performance makes it clear that interest rates have a definite impact on Bitcoin investor sentiment. Higher interest rates tend to force liquidity outflows from risk-on assets such as Bitcoin, while low interest rates tend to favor bullish sentiment.

The FED revealed that it will likely raise interest rates higher as part of anti-inflation efforts.

1/ Fed Chair Jerome Powell indicates that the U.S. economy’s robust growth may warrant further interest rate hikes to curb inflation, as discussed at the Jackson Hole Economic Symposium. #FedPolicy

via @rkansawyer https://t.co/8hHuSg1QiW

— CryptoSlate (@CryptoSlate) August 25, 2023

Bitcoin will likely be in for a more sell pressure if the FED raises rates higher. If That happens, BTC traders should expect the next sup

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Author: Michael Nderitu

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