The crypto market did not believe in a 1% rate hike and turned out to be right. The FOMC meeting that ended up on an optimistic note helped bitcoin to build up a bullish candlestick and the Bullish Engulfing pattern. Yesterday, the asset gained 9%. Early on June 28, the token traded above $23k. The market is bullish, and the price is approaching the key resistance level at around $24k.
The FOMC meeting instilled optimism in the crypto market and boosted its capitalization by 8%. The US regulator announced a decision to lift the interest rate by 0.75% to 2.25%-2.5% and promised to bring inflation to the 2% target. The central bank would continue reducing the balance sheet by $90-$95 billion a month, as stated in May. Chairman Powell says that future rate hikes will depend on how inflation responds.
The crypto market as well as other markets have adapted to the new reality and the aggressive Fed. Markets priced in a 0.75% rate hike because investors have long expected it. Meanwhile, a 1% rate increase would have come unexpectedly and markets would have reacted to it with a fall similar to the one in June.
The Fed also hinted at the possibility of slowing the pace of monetary tightening. Powell said that the Fed would now make rate decisions taking into account GDP and CPI data. This means that the Fed has reached its main goal of combating inflation by raising interest rates.
This tool will now get optional. What is more, the regulator is now planning to bring inflation to a neutral level by the end of this year. Bitcoin traditionally rises on monetary easing. Therefore, we may expect the coin to rally already in 2022.
Bitcoin remains bullish. The asset has broken through the $23k barrier and is now consolidating above $23.1k. Daily trading volumes are now at $35k billion. Likewise, stock indices are on the rise, following the FOMC meeting. The SPX hit the psychological level of $4,000. Bitcoin is approaching the key resistance zone at around $24.4k.
This level is seen as the target for extending the uptrend. On the daily chart, support is seen at $21k. The Bullish Engulfing pattern has formed on the chart, indicating the continuation of the uptrend. Technical indicators signal that the price movement has stopped after a breakout of the $23k level. With the opening of the North American session, BTC may head towards $24k.
It is important to remember that the cryptocurrency's upward potential is limited in spite of good market conditions. This is due to high pressure on the price from market participants, mainly miners who sell BTC for cheap liquidity as well as those in the Asian region. In any case, bullish sentiment in the crypto market is rising, investors are adapting, and liquidity is stabilizing. All these factors indicate that the price may break through $24k and grow to $27k-$28k.
