Bitcoin (BTC) Tumbles Below $76K Following Federal Reserve’s First Rate Hike in Over a Year

Key Takeaways

• Bitcoin dropped beneath $76,000 following the Federal Reserve’s decision to increase rates by 25 basis points, bringing them to 3.75-4%
• This marks the central bank’s first rate increase since July 2023, bringing an end to a three-year period of accommodative monetary policy
• Traditional equity markets rebounded, with the Nasdaq climbing 1.5% and the S&P 500 advancing 0.9%
• CryptoQuant’s Bull Score Index declined from 80 to 60 — representing the platform’s baseline for maintaining bullish sentiment
• Critical support zones identified at $70,000 and between $62,000-$65,000, per CryptoQuant analysis

Bitcoin experienced a decline below the $76,000 mark this week as the US Federal Reserve implemented a 25 basis point interest rate increase. This adjustment elevated benchmark rates into the 3.75-4% range.

Bitcoin (BTC) Price

The rate adjustment represents the Federal Reserve’s initial hike since July 2023. This policy shift concluded a three-year stretch during which the Fed maintained an accommodative stance, either reducing rates or keeping them unchanged between policy meetings.

Following the initial drop, Bitcoin managed to claw back some losses, showing a 0.5% gain at press time. The BTC/USD pair had touched fresh monthly lows on Tuesday before staging a recovery.

TradingView data indicated declining price volatility throughout the past 24-hour period. The one-hour timeframe revealed only marginal price movements.

According to CoinGlass data, both bid and ask liquidity increased around current spot prices. This pattern generally emerges during periods of range-bound market behavior.

Traditional US stock markets showed resilience despite the monetary tightening. The S&P 500 posted a 0.9% increase while the Nasdaq Composite Index surged 1.5%.

Market commentary platform The Kobeissi Letter addressed the equity market recovery in an X post. “The asset owner economy just keeps getting better,” the analysis noted, highlighting the Nasdaq’s performance as proof that asset holders remain insulated from restrictive monetary policy.

Other major central banks have joined the tightening trend. The European Central Bank implemented a 0.25% rate increase in the previous week.

The Bank of Japan is anticipated to reveal its own rate hike on Friday. This would create a scenario where three major central banks tightened policy within mere days of one another.

Bull Score Index Reaches Critical Threshold at 60

The Bull Score Index from CryptoQuant, a metric designed to monitor Bitcoin price cycles, fell from 80 down to 60. According to the platform’s methodology, 60 represents the minimum threshold for maintaining a bullish market classification.

Source: CryptoQuant

Julio Moreno, CryptoQuant’s head of research, provided the company’s perspective in a weekly analysis delivered to Cointelegraph. “The trend is still bullish, but momentum and macro are working against it near-term,” his assessment stated.

Moreno identified weakening US Bitcoin demand and increasing altcoin capital flows as near-term obstacles. The postponement of the CLARITY Act alongside the Fed’s rate decision were mentioned as additional factors supporting an expected consolidation period.

Critical Support Zones Under Observation

The CryptoQuant analysis identified two important support areas for market participants to track. These levels include $70,000 and the broader $62,000-$65,000 zone.

Moreno’s complete analysis concluded: “Bitcoin is cooling, not turning. A Bull Score of 60 keeps the trend bullish, but fading US demand, rising altcoin inflows, and a week of macro risk — the delay of the CLARITY Act and a likely Fed hike — argue for consolidation.”

Bitcoin’s August surge had registered a 25% gain prior to entering the current consolidation phase. Macroeconomic factors have emerged as near-term impediments to any extension of that upward trajectory.

As of Thursday, CryptoQuant’s Bull Score Index registered at 60/100.

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