Bitcoin is currently trading at 29,464, up slightly by 0.50% on Thursday.
However, the cryptocurrency has fallen sharply by nearly 3% over the past seven days following the Federal Reserve’s decision to increase the federal funds rate by 25 basis points.
Despite modest economic growth, central bank moves to tighten monetary policy have put some downward pressure on Bitcoin prices.
Investors and traders are closely watching the market’s reaction to this rate hike as it could affect the future performance of cryptocurrencies.
Fed raises federal funds rate by 25 basis points despite modest economic growth
Despite modest economic growth, the Federal Reserve recently raised the federal funds rate by 25 basis points.
The decision was expected and already reflected in the price, with Bitcoin seeing some improvement the next day.
According to the latest report from the Federal Open Market Committee (FOMC), the goal of the rate hike is to control inflation.
Federal Reserve Chairman Powell mentioned that there is a possibility of adjusting interest rates in September, but suspending interest rates is also a possibility.
The committee has not yet made any decisions regarding future meetings.
However, despite the eurozone officially being in recession, cryptocurrency markets could face some selling pressure on July 27 as the European Central Bank (ECB) is expected to hike interest rates by another 25 basis points.
The Bank of Japan is also debating whether to raise interest rates, which could lead to muggy weather on Friday.
The Federal Reserve’s recent 25 basis point hike in the federal funds rate, despite modest economic growth, had a mixed effect on Bitcoin’s price. While the decision was expected and already factored in, Bitcoin saw some improvement the following day.
Bitcoin Price Prediction
Looking at Bitcoin from a technical perspective, it found support around the $28,850 level, evident from the series of doji and spinning top candles that closed above this level.
Currently, it is just below the important resistance level of $29,500. This particular resistance is further reinforced by the descending trendline visible on the four-hour timeframe.
The recent candle close suggests that there could be a minor correction in Bitcoin price today.
However, it is worth noting that Bitcoin has broken above the 50-period exponential moving average (EMA), which previously served as resistance around $29,250.
Now, this level is acting as a support and a close above this stable support could signal a continuation of the bullish trend.
Analyzing leading technical indicators such as the relative strength index (RSI) and the moving average convergence divergence (MACD), both suggest that the chances of the bullish trend continuation remain strong as they are in the positive territory.
If BTC manages to break above the $29,500 level, the next level of technical resistance could be around $30,000, which also has psychological significance.
Apart from this, the next resistance could be near $30,350. Conversely, if BTC drops below the $28,850 level, the next support area remains near $29,000.
A break below this level could result in a drop towards $28,850.
Overall, technical analysis suggests a cautiously positive outlook for Bitcoin, with potential resistance and support levels to be closely monitored in current market conditions.