Bitcoin. Source: Adobe
Bitcoin (BTC) price is largely unchanged in the mid-$29,000s on Friday.
The cryptocurrency found decent support early in the session as it briefly fell to test the $29,000 level and the 21-day moving average just above it.
But bitcoin bulls appear to be taking a breather ahead of the psychologically significant $30,000 level as key macro events, including a US Federal Reserve interest rate decision, lie ahead next week.
US economic data released on Friday in the form of broadly as expected but still fairly hot core PCE inflation and Q1 Labor Cost Index figures were supported by the market as the argument for an already widely expected next 25 basis point rate hike by the Fed Week.
That would take US interest rates to 5.0-5.25% and markets are even moving to price in a nearly 30% chance of another Fed rate hike at their next meeting in June.
But with banking worries remaining at the fore as the First Republic is placed under FDIC receivership, most analysts expect a pause in the rate hike cycle in subsequent meetings.
The Fed’s rate hike cycle has put tremendous pressure on the banking sector by 1) hitting the value of bank bond portfolios and 2) encouraging withdrawals into higher-yielding money market funds.
As long as a Fed pause remains the baseline assumption, the macro shouldn’t be too much of a headwind for Bitcoin and the broader cryptocurrency market.
And if the US jobs and ISM PMI survey data come in next week and boost US recession bets, it could bolster the Fed’s rate cut bets (even if the Fed continues to crack down on the idea of a short-term rate cut cycle next week). meet).
That could be a tailwind for Bitcoin and help it push back north of $30,000 if the US dollar’s recent downtrend continues and US yields come under pressure.
Here’s where Bitcoin (BTC) could go next
Chart analysis suggests that the 2023 Bitcoin bull market remains very healthy.
Longer term bullish developments such as the golden cross in early February, the strong recovery from the 200DMA and the realized price in March continue to fuel dip buying.
Meanwhile, the 50DMA’s recent rebound and Bitcoin’s positive reaction to its 21DMA on Friday suggests that near-term momentum is still pretty good as well — Bitcoin is up over 8.5% from monthly lows set earlier this week placed below $27,000.
Right now, BTC price is trading in the upper half of a $26,500/$27,000 to $31,000 range that has been in play since mid-March.
But if macro developments allow, a rally towards resistance in the $32,500-$33,000 range and new yearly highs seems on the cards.
Beyond pure chart analysis, on-chain indicators and longer-term analysis of Bitcoin’s market cycle give further reason for Bitcoin bulls to remain optimistic.
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