Bitcoin reaches range high, but can its recovery continue?

Bitcoin climbed to above $18,000 yesterday, reaching resistance at the local range high around $18,170, before rejecting back down to $17,600. Markets were volatile yesterday as always when an FOMC meeting occurs, where the Federal Reserve released the decision of the next U.S. rate hike.

The Federal Reserve raised rates by 50 basis points, as expected, but less than the previous consecutive 75 basis point rate hikes. The FOMC decided to slow the pace of rate hikes following CPI data being released on Tuesday, which showed inflation slowing down again, and being lower than expectations.

The FOMC said, “the committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the committee decided to raise the target range for the federal funds rate to 4.25-4.5%.”

Furthermore, the new dot plot showed shows an increasing terminal rate to 5.25% – the dot plot is where each Federal Reserve member thinks the rates will top out, suggesting we could have another 75 basis points to go before the FOMC stops hiking rates.

Jerome Powell, Federal Reserve Chairman, stayed neutral whilst also saying, “It will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

This means that the following 2 months will be hard to predict, as the Federal Reserve is slowing the rate of rate hikes whilst conditions move us closer toward a recession.

Marcus Sotiriou is a Market Analyst at GlobalBlock, a publicly listed digital asset trading platform.