Bitcoin gained substantially Friday night and overnight, following a Fed meeting that culminated in a 0.75 percent rate rise, as predicted.
BTC/USD climbed from roughly $21,600 before the Fed statements to a high of $23,415 overnight, a gain of more than 8% in a matter of hours.
Most analysts believe Bitcoin’s bullish reaction to the Fed’s rate rise was because the market had already priced in the Fed’s statements. As a result, investors “purchased the news” after “selling the rumor.”
Another reason can be found in the statements of Fed Chairman Jerome Powell, which accompanied the rate increase.
While Powell stated that the Fed will maintain monetary prudence in order to contain inflation, he also stated that the bank may pause its recent rate rises.
Mr. Powell also stated that the US economy had not yet entered a recession, as many analysts feared, citing the strength of the labor market, which added 2.7 million jobs this year, and stating that “it doesn’t make sense for the economy to be in recession.”
Bitcoin technical levels to keep an eye on
Bitcoin’s surge since last night has allowed it to break through the downtrend line that has guided its movement since last week, enhancing its near-term picture.
BTC/USD has also crossed above its 100 and 200 hourly moving averages, which is a bullish indicator. After a failed initial test last week, Bitcoin is now back above its 200-week moving average, which is trading at $22,800.
In the near run, before last week’s top at $24,300, the $23,700/$24,000 zone will be the next obstacle to consider on Bitcoin, in addition to yesterday’s peak at $23,400. On the downside, the first support level to consider is 22,800/23,000$.