Bitcoin (CRYPTO: BTC) shot up over 6% higher between 9:30 p.m. and 10:30 p.m. on Tuesday evening, before falling almost 7% lower over the 1.5 hours that followed.
The crypto then spiked from the $38,850 level up to $41,222.09, as the market awaited the Federal Reserve’s monthly minutes, which when released at 2:00 p.m, caused Bitcoin to fall almost 3% lower before beginning to rebound.
The fed raised its target rate hike to between .25bps and .5bps, which surprised investors who were expecting a more modest 0.25% targeted raise. Wednesday’s decision represents the first time the central bank will raise interest rates since 2018.
By midafternoon, Bitcoin began to recoup some of the losses in tandem with the S&P 500, which also began to rebound. The Fed announced it expects 5 more rate hikes this year, which may have calmed the fears of investors who had been battling with ‘the unknown’ prior to the release of the plan.
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The Bitcoin Chart: On Wednesday, Bitcoin looked to be breaking up from a descending triangle pattern on the daily chart. A descending triangle is usually considered to be a bearish pattern, but stocks and cryptos are known to go the opposite way of what is anticipated.
The upward break from the triangle came on higher-than-average volume, which indicates the pattern was recognized. Over the coming days, Bitcoin may fall down to test the upper descending trendline of the pattern and if the crypto holds above it, the pattern will be confirmed and a retest of the trendline could give traders who aren’t already in a position a solid entry point.
The move higher on Wednesday caused Bitcoin to regain support of the eight-day and 21-day exponential moving averages (EMAs) and the 50-day simple moving average, all of which are bullish indicators. If Bitcoin is able to trade above the 21-day EMA for a period of time, the eight-day EMA will cross above the 21-day, which would give bulls more confidence going forward.
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- Bulls want to see sustained bullish volume push Bitcoin up over the March 9 high-of-day at the $42,597 level, which could indicate a new uptrend is about to begin. The crypto has resistance above at $42,223 and $45,814.
- Bears want to see big bearish volume come in and drop Bitcoin back down below the upper descending trendline of the triangle, which could indicate the move higher was a bull trap. There is support below at $39,600 and $38,105.
Photo: Courtesy of Jorge Franganillo on Flickr
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