Bitcoin and the broader crypto market rapidly reversed course in response to the U.S. Federal Reserve’s announcement of a 50-basis-point increase in interest rates, erasing any gains made before the disclosure.
The Federal Reserve has been steadily raising interest rates in an effort to ease the economy and rein in inflation, which has driven prices of basic commodities to record highs.
Yesterday, Bitcoin’s price reached a one-month high and had a brief recovery of positive momentum, but a conservative report from the Federal Open Market Committee (FOMC) and remarks from Fed chair Jerome Powell drove BTC to an intraday low of $17,659.
A Whipsaw For Bitcoin After Fed Disclosure
According to TradingView data, the BTC price saw a bit of a whipsaw in response to the central bank announcement, rising to an intraday high of $18,377 before falling to a low of $17,663 in a few of hours before bulls pushed it back up above the $17,800 support.
Prior to Powell’s announcement, the key indexes were in the green zone; however, they plunged into the red zone afterwards. At the close of trading, the Dow Jones, Nasdaq, and S&P were all in painted in crimson.
Powell told members of the press on Wednesday afternoon that “we have more work to do” and that “inflation risks are on the upside.”
Coingecko statistics indicates at the time of writing that Bitcoin (BTC) and Ethereum (ETH) values have fallen by more than 2.7% in the last hour and are presently trading at $17,717 and $1,292 apiece.
In the past 24 hours, the market capitalization of all cryptocurrencies declined 1.42 percent to $857.98 billion, representing a decline of $85.72 billion. The overall crypto market volume during this timeframe has decreased by 14.40%, reaching $45.67 billion, based on latest data.
BTC total market cap at $341 billion. Chart: TradingView.com
The Experts’ Crystal Ball: BTC Price For 2023
In its Crypto Outlook For 2023 report by Forbes Advisor, it predicts that Bitcoin’s price could decline to $13,560 in 2023, given that the crypto’s reputation has been severely damaged by the problems and scandals of 2022 and that broader markets are suffering.
Jim Wyckoff, a senior technical analyst at Kitco, has a different take: he said that Bitcoin’s surge to $18,377 indicates a five-week high, which actually signals optimism in the crypto’s price trajectory.
The markets fell from $20K to $15.6K due to the FTX collapse.
We’re currently trading at $18K, slightly higher than the low in June.
I understand the bearish thesis, but this is honestly a sign of strength for #Bitcoin.
— Michaël van de Poppe (@CryptoMichNL) December 14, 2022
According to Wyckoff, this week’s price action has created a bullish “upside breakout” from a “choppy and sideways trading range” on the daily chart, indicating the emergence of a price upswing.
For his part, renowned analyst like Michael van de Poppe says that the market has already reached its bottom and that a Bitcoin relief bounce is in the offing.
Meanwhile, the question that arises now is whether the current market turmoil will persist into the new year, and if so — when the crypto winter’s frozen edges might begin to thaw.