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Fed Dampens Rate Cut Enthusiasm
Bitcoin Price Analysis
The Federal Reserve made the decision in last night’s interest rate decision to keep the federal benchmark rate within the current range of 5.25%-5.50%, as predicted by the majority of analysts. However, in the statement released last night, the Fed maintained a conservative stance, emphasizing that although current inflation has eased, it remains high:
Regarding the possibility of a rate cut, the Fed stated, “The Committee expects that it will be appropriate to maintain the current target range until there is greater confidence that inflation will move sustainably toward its 2 percent objective.” A series of remarks dampened market expectations for a rate cut, leading to a rapid drop in the price of Bitcoin to the $42,000 level.
With more and more financial institutions participating in the cryptocurrency market through Bitcoin ETFs and other means, Bitcoin will become more sensitive to interest rate decisions. James Butterfill, Research Director at CoinShares, pointed out:
In terms of BTC’s price trend, in the past few days, the trend has repeatedly encountered resistance at the $44,000 level (highlighted in red in the chart), followed by a roughly 3% decline driven by bearish news yesterday.
Currently, there are several important support and resistance levels for BTC. In terms of the overall direction, the first level to watch is around $47,000, which was the range when the ETF was first released. BTC can only enter the next bull market once it surpasses this range. Another important support level to watch is around $38,500, which was the starting point of the rally in December last year and has accumulated a lot of buying pressure. The probability of a short-term decline below this range is low, and any price drop near this range presents a good buying opportunity. Currently, the short-term trend is falling to the support level of the short-term line, and we need to closely monitor for signs of a reversal and bottoming out in the next day. In the short term, the profit-loss ratio for long positions is favorable.
(This article is authorized to be reprinted from GT Radar)
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