Bitcoin 'gives back gains' after Fed comments 'add downside risk' to crypto markets

bitcoin ( BTC ) the price continues to send mixed signals, increasing uncertainty among investors and negatively impacting asset prices a...


bitcoin (BTC) the price continues to send mixed signals, increasing uncertainty among investors and negatively impacting asset prices across the market.

Data from Cointelegraph Markets Pro and TradingView shows that the price of BTC has fallen below $36,000 and even though the crypto and equity markets experienced a brief rally of relief on January 26, comments from the recent FOMC meeting seem to be settling in then that investors internalize the fact that interest rate hikes are underway.

BTC/USDT 1-day chart. Source: Trading View

Here’s a look at what analysts and traders are saying about Bitcoin’s most recent price action and macro factors impacting the broader crypto market.

A year of “range bound” trading

The long-term, range-bound trading that BTC has been in since the start of 2021 was discussed by Mike McGlone, Senior Commodity Strategist for Bloomberg Intelligence, who job the following chart and asked, “What ends the Bitcoin, Ethereum range trade?

BTC/USD 1 week chart. Source: Twitter

According to McGlone, the key to escaping the current range lies in the “bullish fundamentals” that support Bitcoin’s underlying strength.

McGlone said,

“According to the rules of economics, a market with rising demand and falling supply will rise over time, suggesting that Bitcoin may bottom again around $30,000 as the $60,000 resistance ages. .”

The Fed continues to add downside risks

A more in-depth analysis of the impact of the January 26 Federal Reserve meeting was provided by Bilal Hafeez, CEO and Head of Research at Macro Beehive, who noted that the tone of the meeting “turned out to be more hawkish than expected.”

Hafeez pointed to the Fed’s decision to raise the inflation forecast as a sign that the central bank has realized that “it needs to be more hawkish than before,” and he pointed to Powell’s comments that “this cycle would be different from the last cycle”. , suggesting faster hikes than before.

That being said, Hafeez indicated that the Fed “hasn’t decided on a path yet” and noted that Powell “hasn’t given much additional information on quantitative tightening except that he would be operating backwards. -plan”.

hafeez said,

“Overall, the Fed is comfortable with the equity and risk market selloff as it tightens financial conditions and could therefore reduce inflation. Bond yields rose after the meetings, equity markets Equities and crypto have returned to gains.The Fed continues to add downside risks to risky markets.

Related: Derivatives Data Suggests Bitcoin’s $39,000 Rebound Was Just a Blow

Short term weakness, long term strength

The short-term outlook for BTC was briefly discussed by derivatives traders and pseudonymous Twitter user Crypto McKenna, who job the following chart and said that “BTC price action is about to get very boring.”

BTC/USD 6 hour chart. Source: Twitter

McKenna said,

“No trading season for the next 10-20 days in my opinion.”

Despite this projection of near-term weakness and sideways price action, the long-term outlook continues to improve for multiple reasons, as noted in the following Tweet from crypto analyst Will Clemente.

The overall cryptocurrency market capitalization now stands at $1.663 trillion, and Bitcoin’s dominance rate is 41.5%.