Bitcoin hit a local high of $41,718 as anxiety grew on Wednesday, that the Fed would increase interest rates
The U.S Federal reserve announced a 0.25% rate hike and signaled six more increments this year
Bitcoin has since dropped below $41k to $40,600
Current prices are a relief for Bitcoin traders given Sunday’s low of $37,555 and expectations of panic selling once the Federal Reserve increased interest rates
In the last 48 hours, Bitcoin has managed to pop above $41k setting a local peak of $41,718 early yesterday, March 16th. The push above $41k was a welcome move and an 11% increment from Monday’s low of $37,555.
However, as soon as the local peak of $41,718 was hit, Bitcoin dropped by 6.9% to $38,828 only to bounce back to $41,478. At the time of writing, Bitcoin is trading at $40,600 as the King of Crypto attempts to reclaim $41k as support.
What the Daily BTC/USDT Chart Says
A quick glance at the daily BTC/USDT chart reveals that Bitcoin is exhibiting bullish momentum as it trades above the 50-day moving average (white).
Furthermore, the daily MFI, MACD and RSI point towards optimism by Bitcoin bulls moving forward.
However, the 100-day moving average (yellow) and 200-day moving averages (green) highlight possible areas of rejection at the $42,500 and $48,600 resistance levels respectively.
Anxiety Over the FOMC Meeting and a Fed Rate Hike
The volatility witnessed by Bitcoin in the last 48 hours was the result of trader anxiety linked to the FOMC meeting at the U.S Federal Reserve that was scheduled for the 15th and 16th of this month. This meeting was particularly important as the Fed was set to announce an interest rate increment set to tame the ongoing inflation (the highest in 40 years) in the United States.
The U.S Federal Reserve has since announced a 0.25% interest rate increment with six more increments expected this year.
According to the Federal Reserve Chair, Jerome Powell, there was a need to act fast to stabilize the US economy. He said:
As I looked around the table at today’s meeting, I saw a committee that’s acutely aware of the need to return the economy to price stability and determined to use our tools to do exactly that.
The current Bitcoin prices and stability come as a relief given that a rate increment by the Fed, was expected to cause panic selling in the traditional and crypto markets.