Will the Fed stop rate hikes? 5 things you need to know in Bitcoin this week

Bitcoin (BTC) is starting another week in an undeniably bullish position as it crosses $28,000.

Cryptomarkets continue to rise due to the banking crisis, still raging in the United States and abroad – where are they going?

After a week of chaos in macro markets and solid gains as a result, Bitcoin and altcoins are circling levels some haven’t seen in nine months.

The 2022 bear market feels like an increasingly distant memory as old resistance levels tumble and bulls try to bolster newly regained support.

This week, like last week, there are all kinds of potential hurdles to overcome – the Federal Reserve will decide on its next interest rate changes and new macroeconomic data will come down.

Markets are likely to remain volatile as a result, and any further unexpected events from the banking sector will only add to the instability.

At the same time, Bitcoin’s own ecosystem will become stronger than ever as network fundamentals hit new all-time highs.

Cointelegraph takes a look at five of the key phenomena to watch in the coming week when it comes to BTC price action.

Fed rate hike cycle questionable

The macro event of the week is undeniably the Fed’s March 22 decision on rate hikes – or lack thereof.

The Federal Open Market Committee (FOMC) faces a major challenge regarding the current policy of quantitative tightening (QT) that has been pursued for the past eighteen months.

The unfolding banking crisis has cast doubt on the Fed’s ability to keep raising interest rates, a policy commentators say has been the death knell for struggling regional banks.

The Fed is nevertheless caught between a rock and a hard place. Raising interest rates would keep inflation in check, but further punish the economy, potentially sparking another wave of bank failures.

“Next week’s FOMC is gearing up to be one of the most interesting in a while, and no one really agrees on what’s going to happen,” says engineer and trader Tree of Alpha In summary.

“Chances are we’re leaning towards 25bps, but it’s a wildcard. Plan longing <=0bps en shorting >=50 bps as safe game.”

According to CME Group’s FedWatch Tool, the consensus as of March 20 favored a 25 basis point Fed hike, rather than pausing hikes altogether. The week before, Goldman Sachs had predicted interest rates to stabilize, while Nomura even predicted a rate cut.

Graph of probability percentages from the Fed. Source: CME group

“This week the long-anticipated March interest rate decision from the Fed comes out. Currently, markets are pricing in a 62% chance of a rate hike of 25 basis points. However, markets are also seeing 100 basis points of rate cuts in December,” said the financial commentary source, The Kobeissi Letter, wrote as part of an analysis of the long-term rate hike roadmap.

Kobeissi and others also wondered how struggling banking stocks would react at the next Wall Street open given the latest government moves over the weekend.

These include a buyout of Credit Suisse, the European banking giant, which saw a particularly violent reaction to the US collapse.

“Credit Suisse, $CS, was worth $10 billion a month ago and sold for pennies on the dollar,” Kobeissi continued about fellow bank UBS buying Credit Suisse and getting $100 billion in government liquidity.

“The government said $CS had a ‘serious risk of bankruptcy’. A shareholder vote was circumvented. Regulators knew bankruptcy was only a matter of hours away. This deal was made out of desperation.”

Bitcoin spot price eyes $30,000

With that, the mood in the Bitcoin and crypto markets has understandably taken a new turn as the week begins.

At the time of writing, BTC/USD was trading above USD 28,400, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1 hour candlestick chart (Bitstamp). Source: TradingView

Already at nine-month highs, the pair managed to beat the bears during a consolidation period last week to return to target levels not seen in nearly a year.

Chief among these is $30,000, a psychologically significant level surrounded by significant historical liquidity. Meanwhile, for monitoring resource Material Indicators and others, an important level of support is the 200-week moving average (MA).

Popular trader Crypto Tony focused on $27,700 to support the bull case and the potential for an attack at $30,000.

“$27,700 put us in the next range between $27,700 – $31,000 now. Using $27,700 as a level bulls must hold to support a move towards $30,000,” he said tweeted.

“Interesting week for sure. My stop loss on my main long remains at $25,500.

BTC/USD annotated chart. Source: Crypto Tony/Twitter

Meanwhile, in new analysis, fellow trader Crypto Chase marked $28,500 as a potential short entry while also entertaining a “somewhat probable” bull case where sales only start above $33,000.

“Please note that I’m not letting go of the idea of ​​28.5K~ shorts. These may still present a great opportunity around FOMC this Wednesday. At the moment, however, I cannot immediately imagine a local summit,” he explains.

“I think there could be a rejection there and I will still look to trade, but those who try to hold a short from 28.5K back to 12K could end up in that 33K liquidity pool.”

BTC/USD annotated chart. Source: CryptoChase/Twitter

Analyst announces end of bear market

However, to some analyzing the long-term picture, Bitcoin has already broken out of a bear market since the comedown from its all-time highs and the start of tightening by the Fed in late 2021.

The weekly close came in at just over $28,000, making it Bitcoin’s highest value since early June 2022.

BTC/USD 1 week candlestick chart (Bitstamp). Source: TradingView

For trader, analyst and podcast host Scott Melker, known as “The Wolf of All Streets”, this has obvious implications.

“The bear market is officially over,” he says proclaimed based on the weekly map data.

“$BTC made its first higher high ($25,212) since the all-time high. This confirms a new bullish trend. The price could still fall, but that would be a new trend, not a continuation of the previous bear market. Congratulations everyone.”

BTC/USD annotated chart. Source: Scott Melker/Twitter

Melker linked to a similar post from August 2019, just after BTC/USD passed $13,000 in a comeback from the pit of its previous bear market.

Equally excited about weekly timelines is trader and analyst Rekt Capital, who continues to see a disintegration of Bitcoin’s “macro downtrend”.

On a quarterly basis, Rekt Capital is monitoring a “bullish engulfing” event in the making, something that has created a significant upside in its own right in the past.

New all-time highs due to Bitcoin’s difficulty

In a classic move, Bitcoin’s network fundamentals are refusing to give up their journey to the moon.

The latest estimates from BTC.com and MiningPoolStats show that both the hash rate and difficulty are in “up only” mode this month.

Overview of the basics of the Bitcoin network (screenshot). Source: BTC.com

The difficulty will be revised upwards by 3.26% over the next few days, bringing it to nearly 45 trillion.

The hash rate reached a local peak on March 13, but is now picking up again as miners react to the latest price action.

However, there is a divergence among miners. According to data from on-chain analytics firm Glassnode, miners’ BTC balances continue to decline on a 30-day rolling basis.

Bitcoin miner net position change table. Source: Glassnode

The most greed since Bitcoin price was $69,000

There may still be reason to fear the current bullish rise in Bitcoin and crypto more broadly.

Related: Bitcoin Levels to Watch as BTC Price Targets Highest Weekly Close in 9 Months

A look at sentiment data suggests that the majority of the market is becoming overly confident in the continued good times.

The Crypto Fear & Greed Index, which uses a range of factors to produce a normalized sentiment score for crypto, is now at 66/100, firmly in its “greed” zone and the highest since November 2021.

Crypto Fear & Greed index (screenshot). Source: Alternative.me

The warnings are confirmed by social media users. a questionnaire from research firm Santiment, which has collected nearly 15,000 responses, shows that most believe BTC/USD will break $30,000 as the next major crypto market event.

Santiment Twitter survey (screenshot). Source: Santiment/Twitter

“Crowd Bullishness Doubles Bearishness for Crypto’s Top 2 Assets,” Santiment noticed about the results.

The views, thoughts and opinions expressed here are those of the authors only and do not necessarily reflect or represent the views and opinions of Cointelegraph.






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