Bitcoin (BTC) consolidated upwards until July 28, after monetary policy changes in the United States gave a boost to risky investments.
BTC/USD 1-hour candlestick chart (Bitstamp). Source: TradingView
Fed Rate Hike Adds To Crypto Optimism
Data from Cointelegraph Markets Pro and TradingView show that BTC/USD climbed to as high as $23,452 on Bitstamp overnight.
The pair has reacted strongly to the US Central bank’s recent key interest rate hike, although it turned out exactly as expected. The subsequent comments of Fed Chairman Jerome Powell intensified the outbreak.
“I think this gives relief to the stock market, because the US central bank recognizes that its policies can have an impact on growth and the economy,” Gargi Chaudhuri, head of iShares, the investment strategy department for the Americas at asset management giant BlackRock, told CNBC:
“The Central Bank recognizes that there are two sides to the matter. There is a trade-off between growth and fighting inflation. We have heard this recognition today, which was not the case before.”
Crypto commentators had already predicted that the Fed was sitting between two chairs. On the one hand, it is facing inflation, as it has not been for 40 years, and on the other hand, the risk of a recession resulting from the fight against inflation.
“Who performs best here? Nasdaq &crypto,” said Alf, the author of the Macro Compass Newsletter, in a Twitter summary of the week’s events:
“If the Fed no longer automatically forces a tightening of financial conditions, real yields will actually fall again.”
Finally, what’s the bond market saying?
We priced away some hikes between now and December, and this is how we are left:
– 50 in Sep
– 25 on Nov
– 25 in Dec
– 50 bps of cuts in 2023
A higher likelihood that “peak Fed hawkishness” is behind us.
– Alf (@MacroAlf) July 27, 2022
He said the next rate hikes would not be as strong as July’s 75 basis points. This “increases the likelihood that the peak of the Fed’s interest rate rage is behind us”.
Close of the day at $23,500
Therefore, regarding the BTC rate, commentators were cautiously optimistic. They are still waiting for the last remnant of volatility to disappear from the market.
In this context: Price analysis, July 28: Bitcoin (BTC), Ether (ETH), Ripple (XRP)
“I don’t want to get too excited too soon, but with daily close above $23,450, I keep my eyes open for long positions towards $26,500,” trader and analyst Crypto Tony said on July 28.
So Bitcoin would have to reach and hold its highs overnight to initiate a turnaround.
A very bullish daily close- we closed above the body of our resistance zone. A bearish retest/rejection would have had us closing below it. We may have just put in our higher low. On LTF, pullbacks to green are healthy- hold it on a test and this is probably a full-on reversal. https://t.co/bgUEWpjJfh pic.twitter.com/FITJPNJRtL
– CrediBULL Crypto (@CredibleCrypto) July 28, 2022
The analysis company Material Indicators sees a “strong long signal” at the end of the day, which further strengthened the short-term upward trends.
“The bear market rally continues,” as it was said in a final tweet with a buy and sell signal chart.
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