After consolidating above $22,600, Bitcoin has now broken the $23k resistance level after the US Federal Reserve. declare the start of the US economic disinflation process, raising interest rates by another 25 basis points. This admission also caused the broader financial markets to rise in the face of the dovish comments.
according to Coingecko, Bitcoin rose 3.2% in the last 24 hours as the announcement of the rate hike hit the market. However, the central bank is still not optimistic about future moves this year with Federal Reserve chairman James Powell looking for more rate hikes in the near future.
At the press conference, Powell pointed out that the Fed may reduce rate hikes due to falling inflation.
“Now we can say that I think for the first time,” he said, “that the process of disinflation has begun.”
Market Too Optimistic?
The 25 bps hike comes after December last month Consumer Price Index Report which shows a downward trend in the CPI since the Fed’s aggressive quantitative easing measures last year. However, at 6.5%, it is still higher than the central bank’s inflation target of 2%.
But the recognition that this is the beginning of the process of disinflation of the US economy has given confidence to the financial markets. Major indexes like NASDAQ have go up despite the increase in interest.
The Federal Reserve building in Washington. Image: Joshua Roberts/Reuters
The rise in crypto and stocks may be a very optimistic market. With the current interest rate of the United States at 4.75%, it is the highest since October 2007, which was a few months before the 2008 financial crisis. However, this small-scale rate hike is evidence that the Fed is a bit dovish about the future of the economy.
At $23.8K, When Will Bitcoin Break the $24k Resistance?
At the time of writing, the alpha coin is trading at $23,828 after declining at $24k earlier today. However, this brief break of the $24k resistance offers a glimpse of a bullish future for Bitcoin. With the Fed slightly dovish and broader financial markets optimistic, BTC may be able to overcome that resistance in the shorter term.
Investors and traders should be able to enjoy the bullish medium for the long term, targeting the $24k resistance. If the bulls succeed in breaking the $24k resistance, $28k can be easily targeted.
BTC total market cap at $459 billion on the daily chart | Chart: TradingView.com
However, with macroeconomics having a strong influence on Bitcoin movements, investors and traders will benefit from monitoring the macro situation as better macros can boost BTC prices.
Now, investors can enjoy holding Bitcoin for medium and long-term gains. But BTC bulls should be careful as Powell recommended that the country will enter any kind of recession.
Feature image by Verdict