Bitcoin Drops Following Fed Announcement
Bitcoin experienced a decline in value after the Federal Open Market Committee (FOMC) announced interest rates and Fed Chair Jerome Powell discussed potential rate cuts in 2024. This disappointing news led to some investors selling their BTC, causing the price to fall below $43,000. Powell stated that a rate cut in March is unlikely, which further dampened investor optimism.
Powell gives a hard shove *against* a March cut:
"I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to [cut], but that's to be seen."
— Nick Timiraos (@NickTimiraos) January 31, 2024
Investor Sentiment Turns Negative
The speech by Powell and the decision to keep interest rates steady did not prevent Bitcoin and other risky investments from experiencing a sell-off. Investors had been hoping for a rate cut after several hikes since 2022. However, market participants are now focused on when they can expect the first rate cut, considering Powell’s previous statement about possible cuts in 2024.
Potential for Bitcoin Price Increase
Although Bitcoin faced a setback, it may only be temporary. The co-founder of Asgard Markets, Alex KrΓΌger, suggests that the market may have overreacted to the rate news. Additionally, there is growing optimism for a pre-halving rally, as Bitcoin undergoes a cycle that reduces miner rewards every four years. Crypto investors see this correction as an opportunity to accumulate more BTC before the next price surge.
This cycle has been a story of Re-Accumulation Ranges, heading into the Halving$BTC #Crypto #Bitcoin pic.twitter.com/PFHAIEg3vC
— Rekt Capital (@rektcapital) January 31, 2024
Bitcoin’s Current Position and Price Predictions
Bitcoin has returned to trading above the confluence support level of around $42,208, formed by the 50 Exponential Moving Average (EMA) and the 200 EMA. If the price closes above the immediate resistance at the 20 EMA, it could potentially reach a peak above $44,000 in the coming days.
According to a report by Finder.com, over 40 cryptocurrency and fintech specialists predict that Bitcoin could rise to $88,000 in 2024. After reaching this level, a drop to $77,000 is expected before another major run that could take the price to $123,000 in 2025 and $367,000 in 2030. The experts believe that the halving will be a significant catalyst for this bull run.
In the medium term, Bitcoin’s price may continue to rangebound between support at $38,000 and resistance at $48,000 as accumulation takes place before the rally.
Hot Take: Bitcoin Faces Temporary Setback Amidst Fed Announcement
The recent announcement of interest rates by the Federal Open Market Committee and remarks by Fed Chair Jerome Powell regarding rate cuts in 2024 have led to a decline in Bitcoin’s value. However, this setback may only be temporary as the market may have overreacted. There is growing optimism for a pre-halving rally, and experts predict that Bitcoin could reach $88,000 in 2024. The halving is expected to be a significant catalyst for the bull run. In the short term, Bitcoin’s price may continue to rangebound before the next major price surge.
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