Bitcoin (BTC) bulls were able to regain control of the market and push the price of the world's highest digital currency by total market capitalization past the $35,000 barrier again, after a volatile trading session filled with events involving macroeconomic risks, including the announcement The latest from the US Federal Reserve on the direction of its monetary policies. For its part, the Federal Reserve announced - unsurprisingly - its choice to keep the interest rate unchanged at its highest levels in decades, amounting to 5.25-5.5%, with its inclination towards further possible increases in interest rates amid concerns Continuing regarding the inflation rate, which is still high, above the Federal Reserve’s target of 2.0%, amid the US economy continuing to enjoy apparent strength.
It is noteworthy that Bitcoin trading was balanced - before the meeting - for about a week, as its price ranged between $34,000 and $35,000, following its jump last October from its lowest levels at $26,000. With the Fed meeting over and offering no surprises to the market, it appears that bulls have taken the green light to start a new buying spree.
The price of Bitcoin rose by 28.5% during the month of October amid a state of optimism regarding speculation that the US Securities and Exchange Commission (SEC) would soon approve requests from BlackRock and other major asset management companies to establish exchange-traded funds for spot Bitcoin contracts. (Bitcoin Spot ETFs), which observers believe will open the door to institutional influx into Bitcoin.
Macroeconomic events provide a favorable environment for investment
BTC's October performance was strong despite generally negative trends in the broader market landscape, such as falling stock prices and rising bond yields. In recent years, Bitcoin's performance has been positively correlated with stocks (particularly technology stocks) and inversely correlated with US bond yields.
While the narrative long promoted by Bitcoin supporters that the leading digital currency should be seen as a safe haven in the face of economic and geopolitical troubles has gained much support this year, the CEOs of major Wall Street firms such as Larry Fink have praised Fink) from BlackRock - in Bitcoin and referred to it as “ digital gold .”
Furthermore, Bitcoin's strong performance in October - despite weak stocks - created a favorable trading environment for investors. However, stock prices rose and US bond yields fell on Wednesday as traders digested the latest news from the Federal Reserve, with focus appearing to shift to an expected start of a rate-cutting cycle in 2024.
So, if November is characterized by rising stock prices and falling bond yields, the broader economic picture may add to the tailwinds that Bitcoin has already enjoyed in recent weeks.
What's next for BTC?
With the price of Bitcoin rising above the $35,000 barrier, the price convincingly broke above the technical “pennant” pattern that had formed over the past few days, noting that the next major level that bulls will target - as shown in the chart - is the extremely important psychological level. $40,000, which represents the highest levels recorded in May 2022.
After that, bulls will target BTC's mid-April 2022 highs at $43,0000 and then 2022 highs above $48,000.
BTC price chart - Source: TradingView This is considered a conditional hypothesis given that the Federal Reserve was not close to starting its rate cutting cycle on Wednesday, but if the macro economy is about to become a catalyst for the crypto boom (i.e. easing conditions ... This, combined with positive news about Bitcoin - such as institutional approval and the upcoming halving event - will mean that its upper price horizons remain clearly broad.
Indeed, the value of Bitcoin has risen by more than 110% over the course of this year, but over the next two months, if the price of BTC manages to reach the key long-term resistance levels mentioned above, we could be talking about gains of close to 200% for the year.
