Analyst says BTC unlikely to fall sharply even if Fed starts raising rates

Crypto analyst Murphy (@Murphychen888) said Bitcoin is unlikely to reenter a bear market immediately even if the U.S. Federal Reserve begins raising interest rates. Murphy said past cases suggest the pace of tightening, rather than the fact of rate hikes itself, and the structure of BTC holdings are the key factors shaping market direction. During the Fed’s total 425-basis-point rate hikes in 2022, BTC fell from about $41,000 at the time of the first hike to $15,800. In 2023, by contrast, BTC rose from $16,500 to $42,000 even as rates were raised four times by 25 basis points each, Murphy said. Murphy added that Bitcoin’s current structure looks more similar to early 2023 than to the period of the first rate hike in 2022, as the asset has spent about six months forming a bottom range and gone through repeated capitulation, with a substantial reshuffling of holdings.