Bitcoin may be limited to gains (short-term) after U.S. Fed opens the door to a faster rate-hike path

January 27, 2022 - 4 months ago
Share on twitter
Share on facebook
Share on linkedin
Share on email

The world’s largest cryptocurrency by market, Bitcoin, hit a three-day high on Thursday after the U.S. Federal Reserve announced that it would keep its benchmark overnight interest rate unchanged between 0.00% and 0.25% but signalled an interest rate hike could be coming soon.

BTC/USD spiked to an intraday high around US$38,900.00 before hitting the brakes to the rally.

U.S. Fed Chairman Jerome Powell said the central bank’s rate-setting committee is ready to raise rates at its mid-March meeting.

“With inflation well above 2 per cent and a strong labour market, the Committee expects it will soon be appropriate to raise the target range for the federal funds rate,” the Fed said in a statement.

The bank also noted that it would end tapering, the process of reducing monthly asset purchases, in early March.

With Bitcoin and Ethereum now booking 6-month lows, market participants are now likely to be questioning whether we are near the bottom, or is there still further to go in this bear phase?

This week’s volatile price action for Bitcoin now eyes the mid-2021 lows around US$29,700.00.

Based on the technical assessment, the three bearish Japanese candlesticks could see another decline as stop-losses could trigger another round of panic (selling/supply), which may ignite the decline to the support region mentioned around US$29,700.00. Reassess from there, as a strong bounce is anticipated.

Viewing the topside, the down channel is assessed from US$39,000.00.

It is from here; a decisive break should reinstate a bullish sentiment and open the path towards the US$43,500.00 region.

Daily Chart of Bitcoin

Bitcoin’s bear phase since Friday has reverberated throughout the crypto market, with leading cryptocurrencies like Ethereum continuing to suffer losses this week after its rebound now appears to have fizzled since spiking an intraday high around US$2,710.0 on Wednesday, its best level since Saturday.

Like Bitcoin, Ethereum is in extreme oversold conditions, based on the technical aspect, viewed from the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator.

Therefore, bullish traders will closely watch this oscillator as it is ascertained they may soon return in greater numbers and potentially ignite a bull-run.

From a broader aspect, the nearest support is viewed from US$2,100.0, with the key support level viewed at (some distance) at US$1,700.0.

Conversely, renewed upside attempts would need to clear the recent intraday high at US$2,720.0, which if seen would open the path towards the (61.8%) Fibonacci retracement resistance level at US$2,900.0, with the near-term downtrend at US$3,280.0.

Daily Chart of Ethereum

Hashgraph (HBAR/USD) weakness hit the brakes after the bearish challenge upon the US$0.19 support was respected.

While intact, the bulls are in a prime position in taking the contest to US$0.25.

A decisive break of this level would expose the US$0.315 potential challenge. Reassess from there.

Conversely, beneath US$0.19 views a broad base at US$0.15.

Daily Chart of Hedera Hashgraph

PanCake Swaps, meanwhile, has hit the bull camp, potentially seen from US$6.60, with US$5.00 expecting a bull ambush if visited by the bears.

The Relative Strength Index (RSI) remains in extreme oversold condition based on the technical aspect.

With the near-term base intact, the bulls are in a prime position in taking the market to the immediate resistance located from US$9.25-50, which is needed to be cleared to support any further upside call seen at US$12.50-80. Reassess from there.

Daily Chart of PanCake-Swap

In other markets, Binance Coin (BNB), the utility token of the global crypto exchange, at present, is coasting sideways above the support region at US$325.00, while the resistance is located from US$416.00 to US$418.00.

Viewing the Relative Strength Index (RSI) 3-daily ‘lookback’ indicator, at present, is in a prime position in supporting the market higher.

Daily Chart of Binance

Share on twitter
Share on facebook
Share on linkedin
Share on email