Bitcoin price recovered quickly after a dip to $61,500 following Fed Chairman Jerome Powell’s comments about keeping interest rates unchanged.
During a panel discussion on Tuesday, April 16, Fed Chairman Jerome Powell explained the need to have a restrained approach in its monetary policy going ahead. He also stressed that the current CPI data has not given any clear indication that the inflation is heading towards the Fed’s targeted goal of 2%.
Powell added that considering the strength of the labor market along with the progress in inflation, it would be appropriate to continue with the tighter monetary policy and allow the data to evolve in order to decide on any further course of action.
During the last month of March, the CPI data came to be higher than expected at 3.5%. Furthermore, 303,000 jobs were added, surpassing expectations, while retail sales increased by 0.7%, exceeding the anticipated 0.4% growth.
This strong labor market and consumer spending show clear signs of economic resilience thereby forcing the Fed for any little rate cuts. Soon after Powell’s comments on Tuesday, Bitcoin and the broader crypto market came under strong selling pressure.
BTC price tanked all the way to $61,500 before recovering again. The entire altcoin space also faced a similar selling pressure on Tuesday. Historically, Bitcoin and a wider crypto market have been volatile to interest rate fluctuations, since they are risk-ON assets. More importantly, the recent pullback comes just a few days before the fourth Bitcoin halving scheduled on April 20.
Bitcoin Stages a Recovery
Following the instant drop after Powell’s comments, Bitcoin price staged a strong recovery hours later. Bitcoin price has regained its crucial support of $62,000 and is currently trading at $63,499 with a market cap of $1.25 trillion.
On-chain data provider Santiment reported that bearish vs bullish arguments remain title towards the bears creating a sense of FUD among the traders. Santiment reports that trader FUD usually leads to a price bounce back, and that’s exactly what happened after yesterday’s price correction.
📊 The ratio of #bullish vs. #bearish comments toward #Bitcoin and #Ethereum is predictably quite negative after $BTC fell to as low as $61.5K and $ETH to $2,890 this past weekend. We are already seeing the effects of trader #FUD, with markets bouncing back now and going the… pic.twitter.com/AYm3taBnEp
— Santiment (@santimentfeed) April 16, 2024
Another popular market analyst Ali Martinez noted that Bitcoin price has been trading in a parallel channel between $61,00 and $72,400. Breaching any of these two levels could lead to momentum in that respective direction.
Let's keep it simple and only focus on support and resistance!
By the looks of it, #Bitcoin has been consolidating in a parallel channel, which makes $61,000 the most important support level and $72,400 the most important resistance level.
If $BTC breaks below support, it could… pic.twitter.com/ae5M2g9CX2
— Ali (@ali_charts) April 16, 2024
According to Ali Martinez, if Bitcoin (BTC) breaches support levels, it might decline to $56,200 or $51,600. However, if Bitcoin manages to surpass resistance levels, the next potential price targets are $79,000 and $86,000.
next