The Federal Reserve System was created to exercise centralized control over the commercial banking system.

Why does it have a huge impact on the cryptocurrency market?

• performing the duties of the central bank of the United States

• maintaining a balance between the interests of commercial banks and national interests

• ensuring supervision and regulation of banking institutions

• protection of consumers' credit rights

• support for the growth of monetary aggregates, corresponding in the long term to the economic potential for increased production

• promoting the effective achievement of employment maximization goals

• maintaining price stability and ensuring moderate long-term interest rates

• ensuring the stability of the financial system, control of systemic risks in financial markets

• providing financial services to depositories, including the US government and official international institutions

• participation in the functioning of the system of international and domestic payments

• eliminating liquidity problems at the local level.


This is precisely why the Fed regulates the general economic situation, raising or lowering rates, for example, balancing between inflation and deflation.

Almost every month there are meetings where the interest rate is manipulated, depending on this the market reacts with a fall or growth at the moment. But not only the figures are important, but also the general rhetoric of the head of the Fed, if he hints at a further increase and tightening of the policy, the market reacts with a fall and vice versa, if after raising the rate the rhetoric is dovish (positive) the market may, contrary to expectations, begin to grow.

For everyone who works in the market, it doesn’t matter whether it’s a cryptocurrency or a fund, it’s important to follow the Fed’s reports; this is one of the factors that should be taken into account when analyzing the situation both locally and globally.

I wrote this in simple words so that everyone who reads it could understand in general terms what it is and why it affects the market, but there are many points that I don’t see the point in writing about because it would not be an article but a whole book.

The conclusion is simple, if you want to understand the market, you should study the topic first, enter in Google "what is the Fed" without understanding this, you will be surprised why at a certain moment, contrary to the stripes that you drew on the chart (technical analysis does not work), the market made a quantum leap or flew down at such a speed that you did not have time to understand how it happened))


For lovers of technical analysis - not one indicator, no triangles or other figures will help you understand what Powell said at the press conference and when it will happen. At the same time, for all lovers of day trading (suffering from nonsense), I recommend going deeper, since knowing the date of the meeting, time and rhetoric of the head of the Fed, you will not have difficulty determining the trend locally 😉