Bitcoin (BTC) rose sharply last night after the Federal Open Market Committee (FOMC), despite the market preparing for a decline. This makes the market sentiment a lot more positive and we even see some fear of missing out (FOMO) take place. Still, several analysts warn that bitcoin may not have bottomed yet.
Bitcoin price is 7.5% in the plus
The bitcoin price had been falling for a week and found support around USD 21,000 on Tuesday. Although the price briefly dipped below that, bitcoin held up here yesterday and already started to climb cautiously in the run-up to FOMC.
Shortly before the Federal Reserve announced the rate hike, bitcoin broke through $21,500. When the Fed made the announcement, bitcoin shot up from $21,700 to $23,000. That was a 6% increase in an hour and a half and with that bitcoin broke the 200-week moving average again.
However, around $23,000, the resistance is still too great. Still, bitcoin held out above $22,750 overnight and jumped to $23,435 early this morning.
However, bitcoin is currently on the decline and the price is at $22,900 at the time of writing on Binance and €22,450 on Bitvavo. This means that the BTC rate is still 7.5% in the plus today.
Fed raises interest rate by 75bps, bitcoin soars
The US central bank raised interest rates by 75bps last night to curb inflation. As we described in these market updates over the past few days, fears of a heavier 100bps increase may have already been priced in. Nevertheless, many market participants still expected a fall in prices with an interest rate hike of 75 bps. For FOMC, we also asked our members what they expect:
After FOMC, the riskier financial markets such as the S&P 500 and Nasdaq, to which bitcoin is highly correlated, were able to rise sharply. The US dollar index (DXY), which has a very high negative correlation with BTC this year, actually fell.
$DXY ⬇️$SPX ⬆️$BTC ️ pic.twitter.com/cnPriQMtpE
— IT Tech (@IT_Tech_PL) July 27, 2022
More important dates today
Still, it doesn’t look very strong macroeconomically. At 2:30 PM Dutch time we will be told how high the growth of the American gross domestic product will be. The Atlanta Fed is already forecasting a 1.2% contraction, according to analyst Caleb Franzen.
The Atlanta Fed’s GDPNow model is forecasting -1.2% real GDP growth for Q2 2022.
This is an upward revision from their last estimate of -1.6%. pic.twitter.com/mK2tnxmLXj
— Caleb Franzen (@CalebFranzen) July 27, 2022
Later today, major technology companies such as Apple and Amazon will also publish their quarterly figures. If it turns out lower than expected, it could send a blow to the stock markets and perhaps this panic could spill over to crypto.
Is bitcoin going down or up now?
In the meantime, we see that analysts are a lot more bullish become. There is even talk of a “mid-term rally” to $30,000, as IncomeSharks below. However, he expects a significant correction downwards after that.
#Bitcoin – The six month plan hasn’t changed. Holders can just sit back and wait. Swing traders like my self still enjoying trading these ranges to accumulate as much $BTC as possible. pic.twitter.com/LcMdfJnm80
— IncomeSharks (@IncomeSharks) July 28, 2022
Analyst Ali Martinez, however, already expects a lot of resistance around $27,000, but reports that in the meantime a lot of support is building between $21,700 and $22,380:
#Bitcoin formed a vital support floor between $21,700 and $22,380, where 691K addresses purchased ~500K $BTC.
As long as this demand zone holds, #BTC has a good chance of surging to $27,000 as the only considerable resistance sits at $23,380, where 285K addresses hold 237K $BTC. pic.twitter.com/qHzMzSJD3F
— Ali Martinez (@ali_charts) July 28, 2022
However, analyst Il Crypto Capo remains very bearish. He warns that the course is still stuck in the same range and there are no signs of real accumulation. He therefore expects the price to change quickly lows will look up. This analyst also expects a significant correction.
Don’t you see that price is just ranging between 19k and 23k during a downtrend and with no signs of accumulation?
If you want to buy here, go ahead. Then don’t regret it and cry if the market makes new lows, which is likely.
I’m not buying.
— il Capo Of Crypto (@CryptoCapo_) July 27, 2022
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