Is The Fed Done Hiking? How Will This Impact Bitcoin?

$30,000 Is Still the Talk of the Town. Break Out or Break Down?

The Federal Reserve and the European Central Bank both did what the markets widely expected: to raise their respective interest rates by 0.25 bps. However, going forward there seems to be a growing divergence between the monetary policies of the two central banks.

The President of the European Central Bank, Christine Lagarde hinted that more rate increases may be needed and said that “the inflation outlook continues to be too high for too long”. It’s clear that the ECB has entered the final stretch of the rate hike cycle but increases are still on the horizon.

On the other hand, the Fed indicated a possible pause in rate hikes and FOMC members voted unanimously for a 25-bps hike. The FOMC statement stressed the need for a “data-dependent approach”.

After Wednesday’s Fed Meeting, Bitcoin started to increase steadily above the $28,000 support. Also, Bitcoin transaction volume has risen, indicating increased demand for the digital asset. This may be a result of more and more businesses offering it as a payment method or a result of a mood change among investors. It’s clear that $30K is a massive psychological barrier and an important hurdle for rising prices; volume could be increasing because bullish momentum is growing, with more market participants anticipating a break of $30K.

Chart Analysis – BTC/USD

Monday was a bad day for Bitcoin bulls as the digital asset dropped to a low of $27,666 according to TradingView data. However, the bears failed to break the 50-day Moving Average and the price bounced higher.

Following the Fed rate decision, Bitcoin further increased and moved above the middle line of the Bollinger Bands, approaching $30,000 and currently trading at $29,235. The pair’s future trajectory will be heavily influenced by the Fed’s monetary policy, which is “data-dependent” according to Fed Chair Powell.

And speaking of data, today the Non-Farm Payrolls report comes out. This could be a major market mover, which may determine the next important move. After the recent bounce at the 50 MA, the pair has been on the rise but on the other hand, in April the bulls have failed twice to break $30,000 and we can see that a lower high has formed on the chart.

The key level is clearly $30,000 and another touch is probable. Whether that touch turns into a breakout or a bounce lower, will determine Bitcoin’s next trend or medium-term move. The NFP release is just around the corner so let’s see how it affects BTC’s price action.