The Fed's interest rate hike has come to an end, Bitcoin remains at $41,000, and will still face volatility pressure in the future

The Federal Reserve announced a 0.25% rate hike on Wednesday, in line with market expectations. Fed Chairman Powell acknowledged in a press conference that current inflation is well above the target range and attributed it to supply chain constraints. The committee also raised its inflation forecast and hinted that it plans to raise interest rates six more times this year by a similar amount. Low interest rates and central bank stimulus measures have driven a rebound in speculative assets, including cryptocurrencies. Bitpush terminal data showed that Bitcoin remained above $41,000, up 3.6% in 24 hours.

However, some analysts believe that cryptocurrencies, which are widely seen as risky assets, will come under further pressure if the Fed continues to tighten monetary policy.

Crypto markets have been range-bound for half a month as investors weigh 40-year high inflation data in the U.S. and geopolitical tensions following Russia’s invasion of Ukraine in late February. Bitcoin remains 8% below where it was trading a month ago and 41% below its all-time high of nearly $69,000 in November. Ethereum, the second-largest cryptocurrency by market value, is trading at $2,751, still 12% below where it was a month ago and 43% below its November 2021 peak.

Ylann Guez, senior trader at crypto trading firm Efficient Frontier, commented that initially, short sellers began to take profits as people expected the monetary tightening plan to be "less hawkish." But from now on, cryptocurrency investors "can expect higher interest rates to put more pressure on prices."

Chris Matta, president of 3iQ US Crypto Asset Management, told Yahoo Finance: "Risk assets remain volatile and the result may be continued uncertainty in the coming months. When we are in a more risk-averse environment, cryptocurrencies are less popular."

Cryptocurrency investors have had a tough time in 2022. Bitpush terminal data shows that so far, the total crypto market value has plummeted by more than $1.1 trillion from its peak of nearly $3 trillion.

On the other hand, Michael Safai, managing partner of British trading firm Dexterity Capital, commented that trading volumes on cryptocurrency exchanges were calm from last Friday to Tuesday night, but the derivatives market showed moderate short liquidations, with Coinglass showing $242 million in the past 24 hours, much lower than in the past few weeks.

“The muted market reaction to consecutive rate hikes could be a sign that the Fed’s decisions are not proving to be a major driver for cryptocurrencies at this point, with moves in derivatives markets telling us that investors remain cautious,” Safai predicted.

The first interest rate hike in more than three years has finally come, and the financial market has long digested the so-called "bad" signal, but the conflict in Ukraine and its impact on broader geopolitics will continue to lead to uncertainty, and volatility may still be the main theme of the current crypto market.