Bitcoin (BTC) Price Surges 3.5% Following Wednesday's FOMC Meeting

Bitcoin (BTC) price has surged 3.5% following Wednesday's FOMC meeting as the US Federal Reserve keeps rates unchanged at 4.5%. However

Bitcoin price showed a slight recovery on Wednesday following the FOMC meeting as the US Federal Reserve keeps rates unchanged at 4.5%. However, Arthur Hayes predicts that the Fed rate cuts would likely resume from April 1 which could bode well for BTC and the overall crypto market, moving ahead.

Discussing the crypto market reaction following the FOMC meeting, BitMEX CEO Arthur Hayes said that the recent Bitcoin price drop to $77,000 could mark its bottom. According to Hayes, QT (quantitative tightening) will conclude by April 1, and if there is an exemption to the Supplementary Leverage Ratio or the resumption of QE (quantitative easing), then we could see bullish momentum.

Moreover, Hayes noted that the correction in the US equity market could continue in order to push Federal Reserve Chair Jerome Powell toward adopting policies favorable to the Trump administration. "Stay nimble and cashed up," Hayes advised.

On the other hand, President Trump took to Truth Social to post: "The Fed would be MUCH better off CUTTING RATES as U.S.Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2nd is Liberation Day in America!!!."

BTC Price Action and M2 Money Supply

Following yesterday’s FOMC meeting, Bitcoin price staged a quick recovery jumping 3.5% and moving all the way to $87,000. Popular analyst IncomeSharks noted that BTC has bounced back from the supertrend support. However, for BTC to resume the uptrend, it must close above the diagonal resistance of $86,351.

Furthermore, the Bitcoin price action could soon follow the M2 money supply which has been rising recently. M2 is expected to grow over time for various reasons, and its high correlation with Bitcoin, combined with a power-law leverage factor of 9, indicates that even small changes in liquidity can have a substantial impact on BTC price. Also, the BTC price prediction data shows it moving to $90,000 by mid-April.

For instance, a 10% increase in liquidity could result in more than doubling BTC price. On the other hand, inflows into spot Bitcoin ETFs have resumed once again with BlackRock’s IBIT leading the show.

Apart from Bitcoin, altcoins have also shown strength following the FOMC meeting. Top altcoins like Ethereum (ETH), XRP, Solana (SOL), and Dogecoin (DOGE) have bounced back 4-10% in the last 24 hours.

Will The US Fed End QT In April?

As the Trump trade war impact intensifies putting American economy on a slowdown, some market analysts believe that the Fed could be the first to blink. While addressing the media on Wednesday, Fed Chair Jerome Powell stated: "The median participant projects that the appropriate level of the Fed Funds Rate will be 3.9% at the end of this year and 3.4% at the end of next year, unchanged from December."

Responding to Arthur Hayes, popular crypto analyst Benjamin Cowen stated that quantitative tightening (QT) will not be ending on April 1 as claimed. Addressing the matter further, Cowen clarified that while QT has been adjusted, it is still ongoing.

“QT is not ‘basically over’ on April 1,” Cowen said. According to him, the Federal Reserve is still reducing its balance sheet by $35 billion per month through mortgage-backed securities. The rate of reduction has slowed from $60 billion per month to $40 billion per month, but the process continues.