Bitcoin

Bitcoin hits new 9-month highs above $28K as markets flipflop over FOMC

03/22/2023
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Bitcoin (BTC) headed to new nine-month highs after the March 21 Wall Street open as a crucial Federal Reserve interest rate decision loomed.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin price climbs despite conservative Fed view

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $28,500 on Bitstamp.

The latest in a succession of multi-month highs, the latest BTC price action precedes what promises to be a volatile day for markets.

The Fed will announce how far — if at all — it will hike its baseline interest rate on March 22, with a pause in the hiking cycle seen as a boon-in-waiting for risk assets.

“Heavily interested to see the outcome of tomorrow,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, wrote in part of a Twitter update.

“Potential sweep into the highs, closing CME gap, trapping everyone & creating bearish divergences is an ideal concept. Key zone $28,700.”

BTC/USD annotated chart. Source: Michaël van de Poppe/Twitter

Bitcoin nonetheless produced interesting moves on the day, with the dollar gains coming alongside volatility in overall crypto market cap dominance.

“Altcoins bleeding, while Bitcoin is still consolidating around the highs. Not the signs you’d want to see,” Van de Poppe warned earlier.

“Money rotating from altcoins towards Bitcoin amid fears for tomorrow’s FOMC meeting. I’d stay relatively calm on positions as well. Obvious opportunities will arise.”

The subsequent comedown after the Wall Street open was described by popular trader Crypto Tony as an “Interesting dump on BTC Dominance creating a spike in Altcoins.”

Bitcoin crypto market cap dominance 1-hour candle chart. Source: TradingView

The mixed signals reflected market ideas for the Federal Open Market Committee (FOMC) meeting. According to CME Group’s FedWatch Tool, the majority now foresaw a 25-basis-point rate hike, in contrast to the pause favored previously.

Fed target rate probabilities chart. Source: CME Group

“All classes” buying BTC

Analyzing trader behavior, meanwhile, on-chain monitoring resource Material Indicators revealed blanket buying on largest global exchange Binance.

Related: Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

A snapshot of the BTC/USD order book showed both large-volume and small-volume increasing exposure pre-FOMC.

$28,500 and $29,000 formed the strongest resistance levels at the time of writing, while the nearest significant support was further from spot price at $27,000.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.