NAIROBI (Coinchapter.com) – In a move closely watched by Wall Street, the Federal Reserve announced it would slow the pace of its balance sheet reduction starting June 1st, a decision that helped Bitcoin make a superb recovery. The announcement sent Bitcoin prices surging over 16%, skyrocketing from $55,000 to a staggering $64,000 in just a few days.
Fed’s Announcement Triggers Bitcoin’s Recovery
Critically, The Federal Reserve revealed it would lower the monthly cap on Treasury securities rolloffs from the current $60 billion to $25 billion. Furthermore, the central bank left the mortgage-backed securities runoff cap unchanged at $35 billion per month.
According to Federal Reserve Chair Jerome Powell, the new caps could translate to a monthly balance sheet reduction of around $40 billion. This is down from the previous pace of $95 billion. Powell emphasized that the decision aimed to approach the Fed’s ultimate balance sheet level gradually, mitigating potential market disruptions.
“The decision to slow the pace of runoff does not mean that our balance sheet will ultimately shrink by less than it would otherwise, but rather allows us to approach its ultimate level more gradually,”
Powell stated during the post-meeting press conference.
Certainly, the Federal Reserve’s recent announcement to slow down its balance sheet reduction set the stage for Bitcoin’s superb recovery. Investors breathed a collective sigh of relief as the central bank signaled a more accommodative monetary policy stance, alleviating fears of excessive tightening.
Bitcoin Bull Cycle Imminent? Technical Analysis Hints So
Bitcoin’s price on May 6th stands at $63,513.92, with a $1.25 trillion market cap and $25.57 billion traded in 24 hours. This is a surge of 3.23%, showcasing strong bullish momentum.
Interestingly, analyst Rekt Capital notes Bitcoin typically sees a “danger zone” correction after halving events. These are often followed by a substantial price surge. The recent 49-day correction could precede a potential bull spike from mid-September to mid-October 2025.
Significantly, whales accumulated over 47,000 BTC on Friday according to CryptoQuant data. CEO Ki Young Ju states this whale accumulation during the dip signals institutional investors view the correction as a buying opportunity. This activity builds confidence in Bitcoin’s long-term trajectory.
Additionally, technical analysis suggests an imminent bull run may be brewing for those accumulating Bitcoin amid the current correction.
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