The Federal Reserve recently raised the Federal Funds Rate by 25 basis points to 5.50%, which is the highest level since February 2021. This decision had little impact on the cryptocurrency market and Bitcoin, according to journalist Ted Talks Macro. The Fed has indicated that it will take a data-dependent approach to future rate hikes and achieving its 2% inflation target still has a long way to go. While some investors were hoping for a more hawkish tone from the Fed, the central bank's cautious approach suggests that it is still concerned about the potential impact of its monetary policy on the broader economy. Ted believes that the full effect of tightening is yet to be felt, and getting back to the inflation target may require below-trend growth and labor market softening. Despite the Fed's decision to raise rates, they may raise them again in September, depending on the data. The Fed's decision to keep Quantitative Tightening unchanged was also a sign that the central bank is taking a measured approach to monetary policy. The markets reacted positively to the Fed's decision, with Bitcoin and US equities both higher. Many investors interpreted the event as a signal that the Fed is getting closer to hitting the pause button on rate hikes, which could be positive for risk assets in the near term.
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FOMC raises rates by 0.25%, Bitcoin stays above $29k. Bitcoin Bulls Charge Forward As Sell Wall Disappears
Following the announcement of a 0.25% increase in interest rates by the Federal Open Market Committee (FOMC), Material Indicators, a crypto market and data analysis firm, has reported that a sell wall at the $29,400 level has disappeared. This level is slightly above Bitcoin's current price of $29,300 at the time of writing. FOMC raises rates by 0.25%, Bitcoin stays above $29k.
According to Material Indicators Firechart, Bitcoin has cleared a significant level, which may allow it to breach higher price levels. However, its 50-day Moving Average (MA) could pose a short-term obstacle, as it currently sits above the cryptocurrency's current price.
Despite this challenge, there is a positive development for Bitcoin bulls, as the cryptocurrency's Average Directional Index (ADX) has significantly dropped and is approaching a neutral level.
Looking at the 1-day chart, this drop in ADX is often followed by a strong uptrend, which could potentially push Bitcoin above the $30,000 mark. Additionally, Bitcoin may be able to trade above its 50-day MA and regain it as a support level, as it has been doing for the last month before experiencing a 5% decline last week.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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