Bitcoin bulls stumble at $23.4K as Fed’s ‘disinflation’ sparks BTC price rally
Bitcoin (BTC) bounced back to key resistance on Feb. 8 as crypto markets received momentum from a familiar source.
Powell: ‘Disinflationary process’ is here
Data from Cryptooshala Markets Pro and trade view showed that BTC/USD reached the important $23,400 zone on Bitstamp overnight.
The pair reacted positively to the latest comments from the US Federal Reserve, which also raised shares during the Wall Street trading session on February 7th.
Fed Chairman Jerome Powell referred to “disinflation” again during his speech, bolstering market hopes that interest rate hikes could slow in line with inflation. This is due to the last meeting of the Federal Open Market Committee (FOMC) on February 1, at which the Fed raised rates by 0.25%.
“The message that we sent at the FOMC meeting last Wednesday was indeed that the disinflationary process — the process of lowering inflation — has begun, and it has begun in the commodity sector, which is about a quarter of our economy,” he said. said at the Economics Club of Washington, D.C.
Nevertheless, Powell warned that there was “a long way to go” and that the US was “in the very early stages of disinflation.”
Despite this, risk assets rose by the Wall Street close, with the S&P 500 and Nasdaq Composite indexes up 1.3% and 1.9%, respectively.
Bitcoin also reversed previous weakness, dropping below $22,700 earlier in the week, but bulls were unable to keep up with the demand for liquidity at $23,400 and above.
This liquidity remained in place throughout the day, as seen in the data covering Binance’s order book. supplied using on-chain monitoring of the Material Indicators resource.
“Markets rallied to close yesterday, and the last Bitcoin H4 candle showed weakness at the resistance level and printed a shooting star,” popular trader Mark Cullen. summarize about recent events.
“Personally, I’m still waiting for the lows to pass. BUT if BTC can close H$ above 23.4k I will look for a push higher.”
Key area dedicated to #Bitcoinso we should look for continuation.
The gameplay is simple;
– Break through $23.3K and see new highs, the correction is over.
– Lose $22.6k and I’ll be looking for $21.5k-$21.7k long #Bitcoin. pic.twitter.com/xJp6iSbeQb
— Michael van de Poppe (@CryptoMichNL) February 8, 2023
Mikael van de Poppe, founder and CEO of trading firm Eight, was also encouraged by Bitcoin’s reaction. A move of $23,300 to more reliable support, he told Twitter followers the same day, would mean that the latest BTC price correction is “over.”
At the time of writing, BTC/USD was trading at around $23,200 with traders still counting down the time until volatility returned.
Golden cross vs. death cross to be decided in ‘a few days’
Looking ahead, we can say that the rest of the week did not have important macroeconomic signals for the cryptocurrency markets.
Bitcoin takes ‘lion’s share’ as institutional inflows hit 7-month high
As Cryptooshala reported, attention has already been focused on next week’s inflation data, presented in the form of the Consumer Price Index (CPI) for January.
At the same time, chart analysts were hoping for a positive result from Bitcoin’s latest golden cross on the daily chart for the first time since September 2021. At the same time, however, the BTC/USD weekly timeframes continued to print a “death cross,” a phenomenon that has often preceded further declines in the past.
“Many say that the Death Cross/Golden Cross lag indicator. This is a lag for those who only think that the Golden Cross means Bullish and the Death Cross means Bearish. I use this indicator to understand Momentum,” fellow trader Jibon wrote in a dedicated tweet. a thread on topic 7 Feb.
Gibon compared the current setting to previous instances in 2015 and 2019 and added that it would take “a few days” for the influence of the crosses to become more apparent.
The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cryptooshala.
Credit : cointelegraph.com