Replays · FOMC · 1 May 2024, 19:00 UK

A relief rally with a short fuse

Crypto went into the May 2024 Fed meeting in bad shape. Bitcoin had fallen below $57,000 earlier that day. The statement and Powell's press conference turned out less hawkish than feared, and coins jumped. Within two hours the gains were gone.

Statement: Wednesday 1 May 2024, 19:00 UK
Decision: Hold at 5.25–5.50%
Balance sheet: Treasury runoff cap cut from $60bn to $25bn a month from June
Powell: Next move unlikely to be a hike
Bitcoin at release: $57,350

The setup

CNBC reported that Bitcoin fell below $57,000 on 1 May, extending a slide that had started in April. Hot inflation reports had pushed rate-cut hopes back, and some in the market feared the Fed might even talk about raising rates again.

Fifty minutes

The Fed held rates and said it would slow the pace at which it shrinks its bond holdings. In the press conference, Powell said he thought it unlikely that the next move would be a hike. Bitcoin rose to about 3.6% above its release price at 19:50 UK, and was +2.65% at the hour. That is 6.1 times a normal hour, #7 of 80 Fed decisions in our data.

1 19:50 UK: Bitcoin's high, about 3.6% up
2 21:15 UK: low, about 1.1% down

Bitcoin, Solana and the S&P 500 ETF over the four hours after the 19:00 UK statement, % from the release price.

Then the rally reversed. Stocks went the same way: the S&P 500 ETF was +1.3% after an hour and -0.2% at the 21:00 UK close. Bitcoin was -0.82% at two hours, its low coming at 21:15 UK, before settling at +0.8% at four hours.

First hour as a multiple of each coin's normal hour.

Cardano and Dogecoin both rose more than 4% in the first hour and gave most of it back by two hours.

Solana and the week

Solana's first hour, +6.1%, was 10.2 times its normal hour, the largest relative move in the set, and it held more of the gain, +5.4% at four hours. Over the week, the slide that had brought Bitcoin to $57,000 reversed: it was +9.1% a week later, with Dogecoin +18% and Solana +15%.

The Fed hour was big but short. The weekly figures suggest the meeting marked a low point for that slide, although the week also contained other news, including a weak US jobs report two days later.

Sources: release time and figures from the Federal Reserve's statement and target range (FRED DFEDTARU). Crypto: Bitstamp 5-minute candles; SPY/QQQ: IEX. No consensus forecasts are shown because they are proprietary; comparisons are with the previous release. “× normal hour” compares the first-hour move with the median move in matched quiet hours. How we measure it.