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Will Bitcoin price reclaim $75,000 ahead of Fed rate decision?

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BTC/USDT 1-day price chart.

Bitcoin price rallied to a 5-week high of $74,157 on Monday morning amid institutional and whale accumulation. Can the bellwether climb past the $75,000 psychological support level ahead of the Federal Reserve interest rate decision set to be revealed later this week?

Summary

  • Bitcoin price rose to a five-week high of $74,157 as institutional inflows and whale accumulation pushed the asset higher.
  • U.S. spot Bitcoin ETFs have attracted $2.1 billion in inflows over the past three weeks, while large wallets increased their share of the total supply.
  • Markets are now watching the $75,000 resistance level ahead of the Federal Reserve interest rate decision expected later this week.

According to data from crypto.news, Bitcoin (BTC) price briefly rose nearly 4% to $74,157 on March 16, pushing its market cap back above $1.48 trillion. Trading at $73,626 when writing, the bellwether now lies 17% above its lowest point this year.

Bitcoin’s price rebound today came as institutions and whales kept buying the dip to bet on the safe-haven asset amid ongoing geopolitical tensions.

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Notably, U.S. spot Bitcoin ETFs have experienced back-to-back net inflows over the past three weeks, bringing the total figure to $2.1 billion. The persistent inflow trend has boosted retail sentiment for the token, supporting its gains.

At the same time, Bitcoin’s gains seem to have been supported by whale accumulation. According to on-chain data from Santiment, wallets holding between 10 and 10,000 BTC have entered an accumulation phase, increasing their share of the total supply to 68.17%. 

This was noted as a “bullish signal” by Santiment, as it suggests that Bitcoin was moving into the wallets of long-term holders.

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Meanwhile, the aggressive buying from Bitcoin treasury companies such as Michael Saylor’s MicroStrategy and Metaplanet has also provided a significant price floor. 

In their most recent filings, Strategy has continued its multi-billion-dollar acquisition strategy, while Metaplanet has mirrored this “debt-for-Bitcoin” model to expand its holdings in the Japanese market.

Retail investors have also been rotating capital away from traditional safe-haven assets such as gold and silver into Bitcoin as they prepare for further volatility amid escalating conflict between the U.S. and Iran. 

The military escalation and attacks on Iranian infrastructure (such as Kharg Island) have led crude prices to spike to multi-year highs as Iran threatened a total blockade of the Strait of Hormuz, a key global oil artery. 

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For now, a major catalyst for Bitcoin price would be the Federal Reserve rate cut decision scheduled to be announced on Wednesday, March 18, at 2:00 PM ET.

Economists broadly expect the Federal Reserve to keep interest rates steady in the 3.50% to 3.75% range, likely maintaining a cautious stance as inflation continues to remain elevated due to the shock in oil prices.

While steady rate expectations have historically tempered the rally of risk assets, Bitcoin’s current momentum and its emergence as “digital gold” suggest that a break above the $75,000 psychological resistance could trigger a massive short squeeze toward the $80,000 mark.

Bitcoin price analysis

At press time, technical indicators on the Bitcoin/USDT 1-day chart also seem to present a bullish setup that suggests a significant trend reversal is underway.

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Bitcoin price has moved above the 50-day simple moving average at $71,164, which is a key psychological and technical level. Last time when it crossed above this trendline back in early February, BTC rallied nearly 33% within a month. 

BTC/USDT 1-day price chart.
BTC/USDT 1-day price chart — March 16 | Source: crypto.news

The 20-day SMA is also on the cusp of completing a bullish crossover with the 50-day SMA, a classic signal often referred to as a golden cross that typically precedes sustained upward momentum.

At the same time, the Aroon lines also added to the bullish outlook with the Aroon Up at 100% in comparison to the Aroon Down at 0%. This is a powerful configuration that hints at a strong emerging uptrend and suggests that buyers are in complete control of the current price action.

For now, the $75,000 zone, which has historically acted as a psychological barrier for traders, will serve as key resistance that would decide the short-term trajectory of the asset. A break above it could embolden bulls to target the next resistance pivot at $80,665.

On the contrary, a drop below the $70,000 support level could invalidate the current breakout and lead to a period of consolidation.

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Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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Crypto World

Trump Urges Fed Rate Cut as Inflation Threat Grows

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Trump Urges Fed Rate Cut as Inflation Threat Grows

US President Donald Trump has again pressured the Federal Reserve to cut interest rates immediately, saying at a White House meeting that they should have a “special meeting” to reduce rates.

“What’s a better time to cut interest rates than now? A third-grade student would know that,” Trump added, according to videos shared on X. 

Trump has reiterated his calls for lower rates after stating on Truth Social on Thursday that the Federal Reserve chair “should be dropping interest rates, IMMEDIATELY.” 

The president argued in January that the US should have “substantially lower” rates and “the lowest in the world,” labelling Powell “too late” and claiming he is “hurting our country, and its National Security” by maintaining high interest rate levels.

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Trump has advocated for lower rates to reduce the cost of servicing the massive $39 trillion US national debt and stimulate economic growth, housing, and the stock market.

Lower rates can also push investors towards higher-risk assets like stocks and crypto. Cheaper borrowing costs also fuel broader market liquidity, meaning more money flows into speculative assets.

No rate changes likely at Fed’s Wednesday meeting 

The US central bank kicks off its two-day March meeting on Tuesday and is slated to announce its rate decision on Wednesday.

However, CME futures markets paint a different picture, currently indicating a 99% probability that rates will remain unchanged in the 3.50% to 3.75% this week.

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The outcome for the April 29 meeting is similar with a 97% probability of no change. 

Related: Higher CPI print for March already ‘baked in’ to BTC price — Analysts

This is despite the expectation that Trump’s pick for Fed chair replacement, Kevin Warsh, who will take the helm in mid-May when Powell’s term ends, may be more open to cutting rates.

The war with Iran has also caused a surge in oil prices, which means higher fuel costs and is likely to push up food and other goods prices via higher transport costs, leading to higher inflation, potentially prompting the Fed to raise rates

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The current rate of inflation in the US remained steady at 2.4% in February, but it is expected to rise in March, according to Trading Economics. 

US interest rates have remained unchanged since December. Source: TradingEconomics

Fed will play the waiting game 

With the US-Iran conflict’s impact on rising oil prices, “traders have already priced in the likelihood of zero cuts this year,” Jeff Mei, chief operations officer at the BTSE exchange, told Cointelegraph.

This should mean that there will be “less downward pressure on crypto asset prices,” because oil’s impact on inflation is “unclear at this point,” and the Fed will likely “continue to wait out the situation.”

Magazine: Metaplanet’s Japan Bitcoin bet, Bithumb ordered suspension: Asia Express