Bitcoin It climbed back above its 21 and 50-day moving averages, back above the $29,000 level, on the back of another rate hike from the US Federal Reserve.
The US Central Bank on Wednesday raised the federal funds target range by 25 bps to 5.0-5.25%, marking an increase of 500 bps in its last ten meetings.
Prior to the rate announcement, many market participants were betting that this would be the Fed’s last hike of this tight cycle, given 1) recent progress in getting inflation under control and 2) recent troubles among regional US banks, Partly from difficult financial conditions.
And the Fed did nothing to push back against this narrative, with the central bank’s policy statement in terms of the appropriateness of further tightening.
As a result, markets are now betting that the Fed will begin an interest rate cut cycle in the second half of 2023 and that it could boost BitcoinWhich was up about 1.5% on the day, and more than 3.0% against the previous session’s low of $28,000.
According to CME’s Fed Watch ToolThe probability that the Fed will keep rates at 4.25-4.5% or lower (i.e. a cut of at least 75 bps worth) by December rose from that low to a little over 60% on Wednesday.
Liquidation of leverage despite 3.0% intra-day swing Bitcoin According to the data presented by the Crypto Derivatives Analytics website, the futures position remained quite low at only around $34 million. Co,
bitcoin is still in consolidation mode
Low liquidations suggest there hasn’t been much of a stir at the Fed meeting Bitcoin Market, as indicated by the fact that prices still remain well within the recent multi-week $27,000-$31,000ish range and a host of other indicators.
These optional indicators include OKEx’s BTC long/short ratiowhich was last at 1.45, largely unchanged from Tuesday’s levels and within recent ranges.
A ratio score above 1 means that traders on the platform are still in favor Bitcoin Inverted, but not as much as last month, when the ratio reached 1.89.
Meanwhile, the BTC margin lending ratio on cryptocurrency exchange OKEx increased from around 30 to around 42 on Wednesday, nearing its all-time high of last month.
Overall, OKX’s long/short ratio suggests that market sentiment has not meaningfully changed since the Fed meeting. Bitcoin — which suited bitcoin’s Wednesday price action — but with the session now over, it looks like traders are once again eager to take profits.
This increases the risk of further liquidation-induced volatility.
Elsewhere, funding rates for taking leveraged bitcoin futures positions remain broadly neutral, according to data presented by Co citing OKX and decentralized crypto exchange dYdK, suggesting that neither bulls nor bears have gained control of the futures market.
Additionally, the delta skew of 25% of bitcoin options expiring in 7, 30, 60, 90 and 180 days was near zero on Wednesday, well above 2022 bear market levels and at a level consistent with the still ongoing 2023 bull market. was unchanged.
According to the data presented by the block,
A 25% delta above zero means that investors are paying a premium for bullish call options, versus their counterpart bearish call options and vice versa.
About the Bitcoin Pop – What’s Next for the Bitcoin Price?
While bitcoin remains well within the recent ranges, the cryptocurrency could again head towards $31,000.
This is because, if the cryptocurrency maintains its current short-term momentum, it could be about to break north of the pennant pattern that has formed over the past few weeks.
Of course, upcoming macro risks, like Friday’s official US jobs report, could put an end to the bullish sentiment.
That’s because if the data is strong enough, it could boost the argument for the Fed to implement more rate hikes, given the current strong labor market. making it complicated.
