Bitcoin (BTC) held the $40,000 level on March 17 after the Federal Reserve’s anticipated key interest rate hike met with a strong response..
Fed points to Ukraine war in comments on inflation
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD rose to local highs of $41,500 after the Fed announced it would raise interest rates by 25 basis points to 0.5%the first such measure since 2018.
The Federal Open Market Committee (FOMC) voted almost unanimously in favor of the risewith an accompanying statement warning of continuing “upward pressures on inflation” thanks specifically to the war in Ukraine.
“Russia’s invasion of Ukraine is causing tremendous human and economic hardship”the statement said.
“The implications for the US economy are highly uncertain, but in the short term the invasion and related events will likely create additional upward pressure on inflation and weigh on economic activity.”
Looking ahead, further hikes will follow, the FOMC continued, and the Fed will begin to reduce its asset holdings in an attempt to reduce its unprecedentedly high balance sheet.
“The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” the statement added. about possible future changes in policy.
After its initial bullish reaction, bitcoin price consolidated higher overnight, still hovering around $41,000. at the time of writing this article.
For Cointelegraph contributor Michaël van de Poppe, the zone just below $40,000 was now essential to break above support.
“The good reaction of the markets is here, when the zone of USD 39,600 was broken”them said to his Twitter followers.
“Next will be the question of whether we can break above the $42,000 high. That would open the doors to the $46,000 barrier. It is crucial that the $39,600 zone for bitcoin holds.”
Those levels were already well established as rungs of the ladder encompassing bitcoin’s 2022 trading range between $33,000 and $46,000, and one analyst argued this week that only a move out of the upper or lower bound would be significant.
Asian markets continue to gain thanks to China’s promises
In traditional markets, optimism also remained; China fueled a rally in Asian equities with promises of favorable policy changes.
“Hang Sang Tech Index jumps 7.8% to extend rally after Beijing capitulates to mkts”, summarized commentator Holger Zschaepitz.
“Before, China didn’t care that Western investors couldn’t invest there. But it needs capital, and it doesn’t need the crash. That’s why the word got out on Wednesday that China would be market-friendly.”
Gold also looked promisingreversing part of its decline from previous highs above $2,000.
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