Bitcoin Price Pumps Back Above $67,000, Up 10% from Intra-day Lows Following Dovish Fed
The Bitcoin (BTC) price is pumping in the wake of the latest Fed policy announcement, which saw the bank leave interest rates unchanged at 5.25-5.5% for a fifth successive meeting and continue to forecast three rate cuts in 2024.
Bitcoin was last trading above in the mid-$67,000s, up around 9% daily. The BTC price has bounced over 10% from earlier session lows under $61,000.
Markets appear to be rallying amid relief that, despite recent hotter-than-expected US inflation figures and activity data, the Fed is set on cutting interest rates three times later this year.
SUMMARY OF FED DECISION (3/20/24):
1. Fed leaves rates unchanged for 5th straight meeting
2. Fed continues to expect 3 interest rate cuts in 2024
3. Core PCE inflation forecast for 2024 raised to 2.6%
4. Fed says inflation “has eased but remains elevated”
5. Fed does not…
— The Kobeissi Letter (@KobeissiLetter) March 20, 2024
That sent the US dollar and US yields tumbling, while the S&P 500 jumped 1% to new record levels.
That’s a great macro backdrop to help the Bitcoin price regain footing.
Bitcoin has struggled recently amid a wave of profit-taking-related sell pressure since hitting record highs above $73,000 last week.
Where Next for the Bitcoin Price?
Bitcoin’s recovery from intraday lows strongly conveys that the bulls are not down and out.
With macro tailwinds coming back three weeks out from the halving, and net spot Bitcoin ETF inflows likely to pick up, Bitcoin could be set for a quick push back to its record highs in the $73,000s.
Wednesday’s close will be important. The Bitcoin price must confirm a breakout above its recent downward trend channel.
That would signal a potential end to the recent bearish trend. While it does appear to have broken the downtrend, a close above $67,000 would greatly boost bullish confidence.
The Bitcoin Price has broken above a short-term downtrend. Source: TradingView
When hitting its sub-$61,000 Wednesday lows, Bitcoin’s pullback from record peaks had reached 17.5%.
Bitcoin has a long history of posting 20-30% retracements during bull market phases.
So, a short-term correction, like seen recently, by no means suggests the bull market is over, and having reached 17.5%, the current correction looked to have been reaching a point of maturity.
Shallower corrections in a post-spot Bitcoin ETF launch world, where the asset class is generally also more mature, make a lot of sense.
Wednesday’s sub-$61,000 lows could well have been it for the latest pullback. The next stop could easily be a retest of record highs.
All said, Bitcoin is still on course to hit $100,000 this year or next.
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