Bitcoin price hovered around the crucial zone of $24,000 in early Thursday trading with the bulls keen on breaking the resistance at that zone. Notably, this has been a steady resistance level since mid August 2022.
A hawkish Fed is largely behind the crypto’s curbed gains. Even so, the Fed Chair’s remarks that “the disinflationary process has started” has improved the risk appetite.
Fed interest rate decision
The Federal Reserve approved an interest rate hike of 25 basis points but gave no signs of the hiking cycle ending in the near term. While Jerome Powell acknowledged that inflation had eased, he was quick to add that it remains elevated.
High inflation and a strong US labor market continues to fuel the Fed’s agggresive monetary policy. Even so, investors in risk asset markets appear to have run with Powell’s statement that the “disinflationary process has started”. Indeed, following these remarks, the crypto fear & greed index is now at a greed level of 60 compared to last month’s fear level of 26.
Bitcoin price prediction
BTC/USD extended its gains in reaction to the Fed interest rate decision. However, as at the time of writing, it failed to attract enough momentum to sustain its move above 24,000.
Earlier on Thursday, the crypto had rallied to its highest level since mid August 2022. However, signs that Fed will continue with its interest rate hikes continue to curb its gains. As at 04:19 a.m GMT, bitcoin price was trading at 23,8892.78; up by 0.62%.
As has been the case since the beginning of 2023, I expect the cryptocurrency to continue trading above the 25 and 50-day EMAs amid hopes over the recovery of the broader crypto industry. Even so, bitcoin price will remain subject to curbed gains in the short term.
Based on this cautiously bullish thesis, my forecast is for the asset to continue finding support at the psychologically crucial level of 20,000 while facing resistance at 25,000. More particularly, it may continue to hover around 24,000 in the immediate term as investors digest Fed’s remarks. Even with the probable pullback, 22,165.87 will likely continue to offer steady support to the asset.