Bitcoin is holding a sideways accumulation pattern and the Fed could be getting towards the end of its rate hiking spree. Are we coming into a crypto spring?
It looked as though it would never end. Arguably the worst bear market in Bitcoin’s history, calls were made across the board for bitcoin to fall to $14,000, $10,000, and sometimes much further.
The same calls were made, except in the opposite direction, when bitcoin was at its peak at nearly $70,000. It’s a ‘thing’ with the market. Whenever everybody is calling for the market to go further up or down, then it’s time to bet against the herd.
Bitcoin has now spent 5 months in a range between roughly $17k to $24k. 5 months still probably isn’t enough time to form the market structure that will be needed in order to propel bitcoin back to its highs, but it’s a good start.
It seemed that everything plus the kitchen sink had been thrown at crypto but the bottom at around $17,700 was still not breached. $13,700 would have been acceptable as a bottom given that this level looks to be the strongest in bitcoin’s history till now.
However, we haven’t been there yet, and bitcoin looks as though it may well hold the critical $19,500 level as support by the end of this month’s candle close, which would give it 5 straight months above, and a strong base from which to potentially take on the $24,000 and the $30,000 resistances.
All eyes on the Federal Reserve
The Federal Reserve looks to have locked in another huge 75 basis point rise for next week. This will be announced on Wednesday and is widely expected by the market.
However, the most interesting moment will be the press conference after the Fed has announced the new rate rise. Here, Fed Chairman Powell is expected to give the market a hint that he will be looking to slow the rate hikes down going into 2023.
The Fed has already released information on this back in September, when it said that it had pencilled in a 50 basis point raise for December, followed by a quarter point rate rise in the first meeting for 2023.
Bitcoin to lead the rally
Of course, this is all inflation allowing, and getting that monster back into its cage may be a battle for the ages. That being said, it can only be a matter of time before the market gains that deep knowledge of what Bitcoin actually does, and as long as regulation isn’t too suppressive, institutions could definitely look to climb aboard that train.
Even while facing possibly the harshest economic landscape in its 13 year history, Bitcoin has managed to weather the storm so far. Should the Fed start to make its long awaited pivot, then Bitcoin could well be in the driving seat to lead all markets in a rally upwards, at least until the next crisis hits.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.