The Fed Dampens Rate Cut Enthusiasm, Where Does Bitcoin Go After Sliding to $42,000?

The Fed Dampens Rate Cut Enthusiasm, Where Does Bitcoin Go After Sliding to $42,000?

The Fed Dampens Rate Cut Enthusiasm, Where Does Bitcoin Go After Sliding to $42,000?

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The Federal Reserve Dampens Rate Cut Expectations
Bitcoin Price Analysis
In last night’s interest rate decision, the Federal Reserve made the decision that most analysts had predicted, keeping the federal funds rate within the current range of 5.25% to 5.50%. However, in the statement released last night, the Fed maintained a cautious stance, emphasizing that although current inflation has eased somewhat, it remains high:
When discussing the possibility of a rate cut, the Fed stated, “The Committee expects that it will be appropriate to maintain the current target range until there is further evidence of sustainable inflation moving towards its 2 percent objective.” A series of remarks dampened market expectations for a rate cut, causing the price of Bitcoin to quickly fall back to $42,000.
As more and more financial institutions participate in the cryptocurrency market through Bitcoin ETFs and other means, Bitcoin will become more sensitive to interest rate decisions. James Butterfill, Research Director at CoinShares, pointed out:
In terms of BTC price trends, in the past few days, the price has repeatedly tested the resistance zone around $44,000 (red area in the chart) but was blocked. Following the bearish news yesterday, there was a drop of about 3%.

Currently, several important support and resistance levels can be observed for BTC. In terms of the overall direction, the first one to note is the range around $47,000 when the ETF was first released. Only when BTC breaks through this range can it truly enter the next bull market. The next important support level to watch is around $38,500, the yellow area at the bottom. This range was the starting point of the rally in December last year and has accumulated a lot of buying pressure. The probability of a short-term drop below this range is low, and any price decline near this range is an opportunity for buying at a low price. Currently, the short-term trend is falling towards the short-term support level, and it is important to closely monitor for signs of a reversal and bottoming out within the next day. In the short term, the risk-to-reward ratio for long positions is favorable.
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