Surprisingly, the cryptocurrency market is experiencing a massive surge today, with Bitcoin currently valued at an impressive $34,628. This surge in value comes after a pivotal moment for the financial industry, with the Federal Open Market Committee (FOMC) recently concluding its penultimate meeting of the year, choosing to maintain a steady interest rate stance.

The Fed’s Role in the Crypto Market

Inflation has surged in the U.S. over the past year, reaching a staggering 9.1% in June 2022. To combat this, the Federal Reserve has taken a bold approach, implementing a series of rate hikes. These aggressive measures have successfully raised the federal funds rate to between 5.25% and 5.5%, the highest level since 2001. This confident strategy has proven effective, with inflation slowing to a more manageable 3.7%.

Expectations for the next financial report

The next big event on the horizon for financial markets is the U.S. Bureau of Labor Statistics’ inflation report, due on November 14. A further decline in inflation could spark a wave of investment in risk assets as investors speculate on a possible rate cut at the upcoming FOMC decision. Such a scenario could boost both stock and bond markets, with bond yields falling and the yield curve flattening.

The connection between cryptocurrencies and traditional markets

Cryptocurrency markets are intricately tied to these broader financial movements, and Bitcoin is no exception. Its value is expected to mirror trends in traditional markets.

ETF boom

JPMorgan Chase expects the first U.S. Bitcoin spot ETF to be approved by January 10, adding an extra layer of excitement to the cryptocurrency space. Rumors surrounding BlackRock’s ETF application have already given Bitcoin a huge boost, pushing its value back toward the $35,000 mark.

MicroStrategy’s Success with Bitcoin

Business intelligence giant MicroStrategy is riding the wave of optimism, boasting a $900 million paper gain on its massive Bitcoin holdings. The company has been actively adding to its cryptocurrency holdings since the third quarter, accumulating 6,067 Bitcoins, including 155 in October alone.

Bitcoin (BTC) Analysis

The price quickly climbed to the $36,000 mark, but the pullback was just as fast. After such a rapid rise, it is not surprising to see a small correction. However, the fact that the higher levels act as support reduces investor concerns. When the market is in an uptrend, dips are seen as buying opportunities, but it is important to identify the local bottom level before buying.

MicroStrategy founder Michael Saylor said that for investors willing to wait 12 to 48 months, the current price may be an excellent entry opportunity. The company's latest financial report shows that they have acquired an additional 155 BTC.

As for Bitcoin price, profit-taking halted gains to $35,985 and the price is struggling to stay below $35,000. If the support is lost and there is a close below $33,390, the price could fall back to $32,611 and $31,200.

Overall, in the uptrend, the bulls are strongly defending the 20-day EMA. If this level holds, it will suggest that the trend remains positive. The bulls are likely to make a fresh attempt to push the price towards $40,000.

Fed swap pricing is pricing in a 100bp rate cut next year, not a 50bp one. This is a result of today’s price action and Powell’s relatively optimistic comments on the macro front. As rates rise, they will fall, creating the image that the Fed is about to reverse from its peak.

Ethereum (ETH) Analysis

Although ETH price briefly broke above the $1,865 resistance level a few days ago, it has followed in the footsteps of Bitcoin and pulled back. The bears will likely try to pull the price towards the $1,746 support level. This could coincide with a support test of BTC. For Ether, a close below the support level would indicate a return to its bearish trend.

If the bulls can overcome the above mentioned resistance, a test of the psychological resistance of $2,000 is likely.

Today’s article ends here. If you like it, please follow me.

The homepage can get other channels and learn more about the sharing of practical articles.