The United States Federal Reserve hiked rates by 25 basis points in their February 1 meeting, which was in line with analyst expectations. Fed Chair Jerome Powell said he doesn’t see a rate cut in 2023 but he used the word “disinflation” 13 times during the FOMC press conference. This encouraged traders to speculate that the interest rate hiking cycle may have ended.
However, the expectations of a rate cut diminished after the strong January jobs report, which showed that the economy added 517,000 jobs, much higher than the market estimate of 187,000. The unemployment rate continued to decline and fell to its lowest level since May 1969.
Buyers tried to propel Bitcoin to the crucial overhead resistance of $25,000 but fell short. This attracted profit-booking from short-term bulls and selling by the aggressive bears, which pulled the price to the 20-day exponential moving average (EMA) as we had suggested in the previous analysis.
The 20-day EMA is flattening out and the relative strength index (RSI) has declined near 60, hinting at a possible range formation in the near term. If bears sink the price below the 20-day EMA, the next support is at $21,500. The bulls are expected to defend this level aggressively. A strong rebound off it will increase the possibility of a range-bound action between $21,500 and $25,000.
Such a move will be a positive sign as it will signal consolidation following the sharp gains made in January. The bulls will have to thrust the price above $25,000 to start a new uptrend. There is no major resistance between $25,000 to $30,000 so the pair could travel this distance quickly. On the downside, if the $21,500 support cracks, the bears will be encouraged to pull the BTC/USD pair to the 50-day SMA.
Lastly please check out the advancement’s happening in the cryptocurrency world.
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