Bitcoin price makes big jump after FOMC, but what next?

Bitcoin (BTC) already started to rise yesterday in the run-up to the Federal Open Market Committee (FOMC) meeting. After the meeting, bitcoin made a big jump, making market sentiment slightly more positive and fear easing slightly. Despite this, it is not yet a real outbreak and fears remain very high.

Bitcoin price rises by 3%

The bitcoin price dipped again to $37,600 on Tuesday, possibly the lower end of this range. Then bitcoin made a big bounce and shot up to $39,000 in one go. Bitcoin struggled with that for the rest of the day.

Shortly after the start of the FOMC meeting, bitcoin briefly rose to $39,250 but was initially rejected and dropped to $38,750. Then it came out that the Federal Reserve is raising interest rates by half a percent, as expected.

Bitcoin then took a big leap, shooting to a peak of $39,950. That, however, remained the highlight for the time being. For the rest of the night, the price gradually dropped to $39,650, but held up.

This morning, however, bitcoin is having more trouble holding on to this, dropping to $39,550 on KuCoin and $37,350 on Bitvavo at the time of writing. Bitcoin is still 3% in the plus today.

Prices rise after FOMC meeting

After the FOMC meeting last night, the Federal Reserve announced that it will raise interest rates by half a percent, or 50 basis points. That caused the fear in the market to ease somewhat. Still, that’s the largest increase in 22 years, with more to follow this year. The next FOMC meeting will take place on June 14-15.

Bitcoin’s rise coincided with green-colored stock markets such as the Nasdaq and S&P 500. The rise was also accompanied by a falling US dollar index (DXY) price. The DXY had been rising for months, but that slowed down last week and the price took a hit yesterday. It still seems very likely that the direction of DXY will determine the riskier markets.

Bitcoin bulls vs bears

Meanwhile, in the crypto world, the debate has again flared up as to whether bitcoin is in a bear market or still in a mid-correction of a bull market.

If bitcoin wants to continue this trend reversal, the price must first make this $39,600 support. Then the price should recapture the $40,000. After that, a key resistance area is between USD 40,600 and USD 40,900. It may then retest the area between $42,500 and $43,000. However, bitcoin may even have to recapture $48,000 first to be able to speak of an actual trend reversal.

Many analysts remain bearish and expect bitcoin to be rejected around any of the above resistance levels. Then it becomes questionable whether the area between $38,000 and $39,000 is holding out again with the $37,600 possibly being the lower end of this range. Otherwise, bitcoin may again become the lows from the beginning of this year or last summer. Since the bulls and bears are still pulling almost equally hard on both sides, bitcoin may be stuck in this range even longer.

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Number of bitcoin addresses is increasing

Despite this, there is still very positive on-chain data to be found. This time about the increase in the number of users. Analyst Ali Martinez, for example, reports, based on data from Glassnode, that the number of new addresses on the BTC network is a bullish divergence forms against the price. As many as 422,000 new addresses were created during the recent decline.

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