Here's why a 0.75% Fed rate hike could be bullish for Bitcoin and altcoins

Here’s why a 0.75% Fed rate hike could be bullish for Bitcoin and altcoins

The S&P 500 and the Nasdaq Composite index posted their worst weekly performance since June as investors feared the Federal Reserve might need to continue its aggressive monetary policy to rein in inflation, which could lead to a recession in the United States.

Bitcoin (BTC) remains closely correlated to the S&P 500 and is on course to fall more than 9% this week. If this correlation continues, it could bring more pain to cryptocurrency markets, as Goldman Sachs strategist Sharon Bell has warned that aggressive rate hikes could trigger a 26% drop in the S&P 500.

Daily view of crypto market data. Source: Coin360

The majority expects the Fed to hike rates by 75 basis points at the next meeting on September 20-21, but the FedWatch tool shows an 18% chance of a 100 basis point rate hike. base. This uncertainty could keep traders on edge, leading to increased short-term volatility.

If the Fed’s rate hike is in line with market expectations, some cryptocurrencies could attract buyers. Let’s study the charts of five short-term positive cryptocurrencies.