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Bitcoin Rebounds Above $29,000 Following Fed Announcement as Market Expects Rate Cuts – What’s the Next Move for BTC?

Bitcoin has rebounded and climbed above the $29,000 mark, surpassing both its 21-day and 50-day

moving averages, following another interest rate increase by the US Federal Reserve.

The US Federal Reserve increased the federal funds target range by 25 basis points (bps) last Wednesday, bringing it to 5.0-5.25%.

This marks 500 bps worth of rate hikes in the central bank’s last ten meetings.

Before the announcement, a lot of traders had speculated

that this would probably be the final hike from the Fed during this tightening cycle, due to two main reasons.

Indeed, the Fed’s policy statement did not provide any hints of future rate hikes

, which led some market participants to speculate that the central bank could potentially cut rates in the future if economic conditions worsen.

This speculation, combined with the relief rally following the rate hike, may have contributed to the uptick in the BTC price.

The anticipation of an interest rate cutting cycle in the second half of 2023 has led to an extension of bets in the market, potentially boosting Bitcoin.

The cryptocurrency has recovered above $29,000, rising above its 21 and 50-day Moving Averages, and was up around 1.5% on the day.

It had earlier hit session lows in the low-$28,000s but then rose more than 3.0%.

This comes after the US Federal Reserve announced a 25 bps hike in its federal funds target range to 5.0-5.25%, with many market participants betting that it would be the last hike this tightening cycle.

The CME’s Fed Watch Tool indicates that the likelihood of the Fed cutting rates to 4.25-4.5% or lower

(which is equivalent to a minimum of 75 basis points worth of cuts)

by December has slightly increased, standing at just over 60% following Wednesday’s rate announcement.

Bitcoin remains in consolidation mode

The relatively low level of liquidations suggests that the Fed meeting did not have a significant impact on the Bitcoin market.

This is supported by the fact that Bitcoin prices are still within the recent range of around $27,000 to $31,000 and other indicators also suggest that Bitcoin is still in consolidation mode.

OKX’s BTC long/short ratio, currently at 1.45, has remained relatively stable since Tuesday and is within recent ranges, indicating that the Bitcoin market has not been significantly impacted by the Fed meeting.

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