Market expectations were met as the U.S. Federal Reserve (FED) announced an interest rate hike of 25 bps pushing Bitcoin into the green. The cryptocurrency was hinting at bullish price action during the week, as today’s Federal Open Market Committee (FOMC) closed in.
At the time of writing, Bitcoin trades at $41,300 with 5% profits on the last day. BTC’s price was able to break above this price point after a brief period of volatility as FED Chair Jerome Powell began its intervention.
BTC’s price reacted to the upside and could continue on this trajectory in the short term, as the FED met market expectations.
In the medium term, according to Material Indicators (MI), the FED projects 7 rate hikes that hint at a potential hawkish approach in monetary policy. This could translate into a headwind for BTC’s price and the crypto market.
The U.S. financial institution is determined on reducing inflation which currently stands at a multi-decade high. However, reducing inflation could prove difficult in the current macro-economic environment with the war in Ukraine and supply chain obstacles.
Bitcoin’s current price action moves in tandem with MI’s analysis. Expecting a rally in the short term, the analysts are still reticent to call in a BTC’s price bottom. Sharing the chart below, MI added:
Although Bitcoin has been testing the 200 MA on a 3 Day chart since January and interactions with that range are rare, most traders are looking at the 200 Weekly MA to be a more valid level to bottom test.
In addition, the analysts believe Bitcoin could resume a more persistent bullish trend if it’s able to reclaim previous lows and break above a new all-time high beyond $69,000.
Bitcoin In The Long Term, A War For Global Dominance
The War in Russia, inflation, supply obstacles, and the recent possibility for Saudi Arabia to start accepting the Yuan for oil transactions add to an already dangerous mix of uncertainty.
MI believes there is an ongoing war against the U.S. dollar as a global reserve currency. Driven by Russia and China, this conflict could potentially escalate leading to a “black swan event”, like during 2020 when the crypto market reacted to the COVID-19 pandemic.
Bitcoin could come out on top in a world where decentralized and un-censorable money becomes a need for the global population. MI said:
The possibility of WW3 makes talking about trading crypto seem petty, but you must plan and prepare for a black swan event. That means conservative risk management and preserving capital for what may be a life changing, generational buying opportunity.