Bullish View
Buy the BTC/USD pair and add a take-profit at 46,000.
Add a stop-loss at 43,000.
Timeline: 2 days.
Bearish View
Set a sell-stop at 43,500 and a take-profit at 42,000.
Add a stop-loss at 45,000.
The BTC/USD rebounded in the overnight session as investors reacted to the Federal Reserve decision. The Bitcoin price rose from a low of $39,680 to the current $44,100. It still remains about 16.50% below the highest point this month.
Fed and Bitcoin
The Federal Reserve plays an outsize role across the financial market. As the most powerful central bank in the world, its actions tend to have a major impact on the market. For example, the bank was credited for the crypto boom that happened from April last year.
At the time, the bank decided to push interest rates to a record low. It then launched its biggest quantitative easing (QE) ever. Since that period, the bank has been printing $120 billion per month, which has pushed its balance sheet to more than $8.5 trillion.
The bank signalled that it will start scaling down some of these accommodative policies in the near term. It expects to start slowing down the pace of purchases in the coming months. At the same time, more bank officials believe that it will start hiking interest rates this year. This was notable since most officials were expecting to start hiking in 2023.
Therefore, the BTC/USD rose after the hawkish Fed decision because that sentiment was already priced in by the market. Indeed, the US dollar declined while stocks rebounded.
The pair also rose after Robinhood announced it will launch cryptocurrency wallets on its platform. This will see the company, which disrupted the brokerage industry, compete with incumbent players like Coinbase, Binance, and Kraken. The wallet will see the company’s customers be able to transfer cryptocurrencies and even use them for shopping.
This was a notable announcement for Robinhood because cryptocurrencies account for a substantial share of its total income. Its crypto offerings brought in more than $233 million in the second quarter.
BTC/USD Signal
The four-hour chart shows that the BTC/USD pair formed a bullish candlestick pattern on Wednesday. It then bounced back by more than 10% after the Fed decision. On the four-hour chart, the pair is at the 25-day moving average while the MACD has formed a bullish crossover pattern. It also moved above the key resistance level at $43,460, which was the lowest level in the first two weeks of the month.
Therefore, with volume rising, the pair will likely keep rising as bulls target the next key resistance level at 46,000.
