Bitcoin Price Soars as Fed Signals Interest Rates Will Continue to Rise

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(Kitco News) – Federal Reserve Chairman Jerome Powell revealed that the central bank would raise the level of benchmark interest rates by an additional 50 basis points on Wednesday, a move largely in line with expectations. The crypto market had a “sell the news” type reaction to the announcement, as prices fell significantly following the revelation of the decision.

There was a similar response in traditional markets, with major indices falling into the red after being in the green before Powell’s announcement. At market close, the S&P, Dow and Nasdaq all ended negative, down 0.61%, 0.42% and 0.76%, respectively.

Data from TradingView shows the price of Bitcoin (BTC) received a slight boost in response to the news, with the top crypto hitting an intraday high of $18,377 only to dip to a low of $17,663 within hours. before the bulls offer it. back to support above $17,800.

BTC/USD 4 hour chart. Source: Trading View

The spike at $18,377 marked a five-week high for the top crypto according to Jim Wyckoff, Senior Technical Analyst at Kitco, who noted that “price action this week produced a bullish ‘breakout’ on the upside. from a choppy, sideways trading range on the daily bar chart, to suggest that an upward price trend will develop.

Looking ahead, “bulls have the short-term technical advantage and have momentum on their side,” Wyckoff said, in a possible sign that the worst of the crypto winter may now be over.

Look for a new $17,200 test

Bitcoin’s daily chart shows that Wednesday’s rise pushed it back into the range it was trapped in from June to early November, when FTX’s crash sent prices tumbling.

BTC/USD 1-day chart. Source: Eight Global

Eight Global founder Michaël van de Poppe noted that the return to this range for Bitcoin was “very important for further upward momentum” in his latest newsletter to subscribers.

“In range, we can see that we have a lot of inefficiency left from all the chaos that happened during November. Inefficiencies tend to work like a magnet for price, filling inefficiency would cause a rebalancing of the chart,” Poppe said. “Getting positive signs from tonight’s press conference would likely push the price up towards at least $18.6,000.”

While the market initially responded positively to Powell’s announcement, a more hawkish stance emerged as the Fed Chairman elaborated on the central banks’ outlook, which prevented Bitcoin from hitting the $18,600 target. of Poppe.

Going forward, “the main area of ​​interest for a long time is the region around $17.2000,” according to Poppe, who suggested that “moving back towards this level could give us a sharp reversal of support/resistance.”

And in a message aimed at bears calling for new lows, Poppe posted the following tweet adding context to the weakness seen in the market over the past month and a half.

Markets fell from $20,000 to $15,600 due to the crash in FTX.

We are currently trading at $18,000, slightly above the June low.

I understand the bearish thesis, but this is honestly a sign of strength for #Bitcoin.

— Michal van de Poppe (@CryptoMichNL) December 14, 2022

A mixed reaction in the altcoin market

The altcoin market’s response to today’s Fed interest rate announcement was mixed, with half of the market seeing gains on the day while the other half was in the red.

Daily performance of the cryptocurrency market. Source: Coin360

The best performers of the day include Digibyte gaining 20.88%, a 10.93% price increase for Toncoin (TON) and an 8.53% gain for BinaryX (BNX)

The overall cryptocurrency market capitalization now stands at $867 billion, and Bitcoin’s dominance rate is 39.5%.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. This is not a solicitation to trade commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for loss and/or damage resulting from the use of this publication.

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