The question is whether bitcoin could hold onto the latest gains and extend the advance in the days to come
The bitcoin price rallied nearly 8% on Wednesday as the Federal Reserve meeting outcome sparked a broad-based rally across the financial markets. The central bank raised its interest rate by 0.75% as expected by market, but hinted that it could slow the pace of its hiking cycle at some point. A less hawkish tone by Powell triggered a jump in risky assets including cryptos.
The BTCUSD pair finished just below the $23,000 mark to extend the ascent on Thursday. Earlier in the day, the coin registered nearly one-week highs around $23,400 before retreating slightly in recent trading. As investors continue to digest the Fed’s more cautious message, the largest cryptocurrency by market capitalization is likely to stay elevated along with stocks in the near term.
However, the question is whether bitcoin could hold onto the latest gains and extend the advance in the days to come as the overall tone among risky assets remains fragile and vulnerable. Furthermore, BTC could attract renewed selling pressure on rallies as short-term traders could opt to take some profit at higher levels. In other words, market players should be careful to not get trapped into the wrong side of the move.
A failure to hold above $23,000 would be early evidence of a false bounce. On the upside, a decisive break above the mentioned highs would pave the way towards the $23,700 intermediate barrier on the way towards the $24,000 mark. As a reminder, the crypto rally last week was capped by the $24,300 zone that could deter buyers once again and thus form a double top if the market retains bullish bias in the immediate term.