Bitcoin (BTC/USD) just broke above a consolidation near 23,000!
In case you missed it, the Fed recently raised its interest rates by another 25 basis points to 4.75%. Members also warned that “ongoing rate rises” will still be appropriate especially since they expect inflation in the services sector to be stickier than inflation in goods prices.
But rate increases are no fun for risk takers. They want to talk about Powell mentioning the start of the “disinflationary process.”
Not to be confused with deflation, DISINFLATION is a slowdown in price increases. While it means that prices are still rising, disinflation also allows the Fed to not tighten its monetary policies as aggressively as it did in 2022.
The prospect of less hawkish Fed policies weighed on USD and pushed “riskier” bets like BTC higher.
Bitcoin (BTCUSD) 4-hour Chart by TradingView
BTC/USD, which was consolidating in a 22,400 – 23,800 range, spiked higher and briefly traded above the 24,000 psychological handle.
Is BTC now headed for new resistance levels?
I’m keeping close tabs on the 25,250 – 25,500 zone. See, the area supported BTC/USD in May 2022 and was a major resistance zone in August.
Of course, that’s only if BTC/USD manages to maintain its bullish momentum.
Stochastic has already formed a bearish divergence on the 4-hour time frame, indicating that momentum is slowing down even as prices are making higher highs.
Unless we see BTC/USD trade firmly above 24K, the crypto pair will be vulnerable to a trip back to last week’s range.
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