Will Powell Bring a Relief Rally for Bitcoin? Here’s what to expect
Federal Reserve Chairman Jerome Powell is expected to issue the latest update on interest rate hikes as part of the institution’s move to tame inflation that has been coming down. In fact, the cryptocurrency market will follow the update as it will potentially highlight the next price action for assets such as Bitcoin (BTC).
With the inflation data coming in lower than expected, there are expectations that the Fed is likely to raise interest rates by 50 basis points.
In this line, crypto trading expert and analyst Michaël van de Poppe has suggested that the Fed’s decision is likely to offer Bitcoin a relief rally if rates do not reach 75 basis points, he said in a YouTube video on December 14.
What to expect for Bitcoin
According to Poppe, reduced interest rates from last month’s numbers will likely give Bitcoin a chance to maintain recent gains. However, he warned that the market is likely to pull back if 75 basis points is announced.
“If we get a 50 bps case, that will provide significant continuation in the market for a temporary case, because the recession is most likely going to start next year, which will put the markets back down a bit more, but it provides ingredients that we need if we want emergency help, said Poppe.
Overall, inflation eased to 7.1% in the 12 months to November from a record high of 9.1% recorded in June. Therefore, the data gives the Fed some breathing room to lower interest rates.
Bitcoin price analysis
At press time, Bitcoin was trading at $17,959 with daily gains of less than 1%. On the weekly chart, Bitcoin has increased by over 7%.
Currently, the asset is looking to regain the $18,000 position. In this case, Poppe noted that if the markets get a temporary extended relief rally, the asset is likely to claim the $18,200 position as a critical resistance position.
“We’re grinding up and we’re facing the crucial resistance zone, which is the $18.2 area like in May or June. We’ve crashed to $17.6 and we have to retake 18.2 and if we do it, we’re back in the series, Poppe added.
Despite Bitcoin remaining highly volatile in 2022, a previous Finbold report indicated that the flagship cryptocurrency has emerged as the best-performing asset in seven of the past ten years.
Disclaimer: The content of this page should not be considered investment advice. Investment is speculative. When you invest, your capital is at risk.
