Bitcoin (BTC) price struggled to maintain the upsurge as FED announced to hike interest rates by 25bps amid banking debacle. The Federal Reserve raised interest rates by a quarter-point, accounting for the ninth increase in a year. FED chair, Jerome H. Powell, disclosed that the aim behind the rate hike is to balance two conflicting problems – the risk of runaway inflation and the threat of turmoil in the banking system, according to a New York Times report.
BTC Tumbles with Rate Changes
BTC saw a drop in the price after the FED chair announced a rate hike by 25bps. BTC has always suffered losses whenever the FED raises the rates. This is the ninth increase in a year and can hinder the high run for $30,000. Earlier, when FED raised rates in February and December, BTC witnessed a temporary downturn affecting the projected targets.
The selloff took BTC retracing from the primary resistance near $28,100, creating a possibility for BTC to test lower prices. The lower support would create another higher high and higher low, further suggesting a brewing uptrend across the crypto market. Fed lowering its aggressive rate increase could indicate that the banking industry is wounded beyond repair, which ultimately could be a boon for Bitcoin.
BTC Price Action
BTC price signals retracing from the resistance after facing rejection at $28,100. The price saw a temporary downtrend, everytime Fed announced a rate hike. The volume shows buyer-dominance, but the recent selloff caught the BTC rally off-guard. The projected correction in BTC can test lower supports, and prepare for a robust rally.
The RSI returns from the overbought zone, suggesting a decline in buying action, or sellers overpowering the buyers. The MACD formed a positive cross and recorded buyer bars, but it might decline after the seller’s gain power. The indicators show a tumultuous situation, but can be beneficial in the long term.
Conclusion
BTC witnesses a fall after the Fed chair announces a rate-hike amid a banking sector turmoil. The rate hike can affect the BTC bullish momentum temporarily, but prove to be a boon in the long term. The rate hike pattern has shown a temporary downtrend for BTC, but it has strengthened the long-term uptrend. The holders of BTC can rely on the support of nearly $24,000.
Technical levels
Support levels: $24,000.00 and $20,000.00
Resistance levels: $28,100.00 and $31,500.00
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only, and they do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2023/03/23/btc-price-tumbles-after-fed-chair-announces-rate-hike-by-25bps/