TradingView data showed Bitcoin rising to $29,114, then unexpectedly reversed course, falling below the $28,000 and $27,000 support levels to $26,810.
In a move that mostly met expectations, the Federal Reserve increased interest rates by 25 basis points on Wednesday. This action sparked a wave of turbulence in the cryptocurrency market and sent asset prices soaring across financial markets – Bitcoin rising, then unexpectedly, falling!
U.S. stocks were up for the day before the Fed’s decision, and they spiked up as it got closer, but after Fed Chair Powell’s press conference, they crashed into the red, snapping a two-day winning run. The S&P, Dow, and Nasdaq were each down 1.65%, 1.63%, and 1.60% at the end of trading.
According to TradingView data, Bitcoin (BTC), which had been trading around $28,300 during the morning session, soared to a high of $29,114 just before Powell’s press conference. It then abruptly reversed course and fell under the $28,000 and $27,000 support levels, reaching a low of $26,810.
Before the afternoon’s developments, Kitco senior technical analyst Jim Wyckoff said, “Prices are in a typical pause after achieving a contract high Monday. Despite a daily bar chart price increase, bulls still have the technical edge.
In his morning Bitcoin post, Wyckoff stated that “Further upside is probable in the immediate term,” but Powell’s comments appear to have disrupted the “fledgling price rise” and allowed bearish to seize charge.
Consolidation after the increase of interest rates
Eight Worldwide analysts said Bitcoin’s price rise represented a departure from its longest accumulation period. “This tells us the strength now in the crypto market, and consequently the confidence of market participants,” they wrote in a morning report before the Fed’s rate move.
“BTC is at a solid resistance zone, $28.5-32.5k. “BTC will not pass through this easy, thus many will secure profits here,” the analysts concluded. If BTC rejects here, a correction to the old range high is likely. And this $25-25.5k zone will support.”
Eight Global stated that Bitcoin “will eventually break through, and rise towards $37-38K” if it can consolidate in the resistance zone. Another 25% price hike.”
Eight Global founder Michaël van de Poppe tweeted the following morning update after Powell’s announcement, adding he “expects some consolidation before continuation” for Bitcoin.
Altcoins suffer losses
Due to improving fundamentals, a few tokens in the top 200 managed to stay in the green despite the Bitcoin collapse.
iExec RLC (RLC) rose 12.76%, Gitcoin (GTC) 12.48%, and Blur (BLUR) 9.69%.
Bitcoin controls 46.2% of the $1.16 trillion cryptocurrency market.