Bitcoin's Wild Ride: Highs and Lows as Fed Signals Tightening
Bitcoin's surge earlier this week was short-lived as it dipped to slightly above $27,000 on Wednesday afternoon following the Federal Reserve's announcement of a quarter-point rate hike
Bitcoin, the world's largest cryptocurrency, experienced a sharp drop in value on Wednesday afternoon, falling to just over $27,000 after the Federal Reserve announced a rate hike of a quarter of a percentage point. The Fed's decision to raise interest rates by 25 basis points came as no surprise, but it dashed hopes that it would end its hawkish stance in light of recent banking near-meltdowns.
BTC had reached a peak of $28,815 earlier in the same day, the highest it had been since June 10, 2022, as certain investors anticipated that the Fed would ease up on its rate hikes. Those hopes were swiftly dashed, though, as Fed Chairman Jerome Powell stated that a rate cut was improbable for the remainder of the year. Powell's remarks were accompanied by an FOMC statement recognizing that recent developments are expected to tighten credit conditions and put a strain on economic activity.
Other major cryptocurrencies were also trading in the red on Wednesday, with Ether, the second-largest cryptocurrency, down about 2.4% to $1,761 according to Coingecko after reaching an intraday high of $1,821 just days earlier.
Despite the bearish market, Bitcoin's price is attempting a fresh increase, having found support near $26,600. The price is currently trading above the $27,000 resistance and could rally again if there is a clear move above the $28,000 resistance zone.
However, if Bitcoin fails to clear the $28,000 resistance, it could start another decline. Immediate support on the downside is near the $27,000 zone, with the next major support near the $26,600 zone. Any further losses could send the price towards the $26,000 and $25,200 support zones.
Overall, the cryptocurrency market remains volatile and sensitive to global economic events and monetary policy decisions. Investors should remain cautious and be prepared for sudden market movements in the near term.
About the author
Lee Brooks
Lee Brooks is passionate about the world of blockchain and crypto and by the endless possibilities these technologies offer
