Better than expected inflation data came out Wednesday morning and Bitcoin put on a spurt on the news. However, Federal Reserve Chairman Powell did his customary jawboning act in order to dampen market exuberance. Bitcoin fell back as a result.
FOMC meeting ups and downs
Markets were fairly nervy going into the Federal Open Market Committee meeting which began on Tuesday. On the day, Bitcoin fell as much as 5%, which was equivalent to a reversal of around $3,450.
On Wednesday, the second, and last day of the FOMC meeting, the inflation data came out unexpectedly positive and beat market expectations. Bitcoin rocketed up on the news and went all the way back to the resistance at $70,000.
When Fed Chairman Powell came out to deliver his speech at the close of the meeting, he probably had a remit to strike a hawkish tone, given that the inflation data was only slightly better than the forecast. The last thing the Federal Reserve would have wanted is for the markets to run hot again.
Therefore, Powell stuck doggedly to his task and went with the narrative that the Fed was now looking at only one rate cut this year, instead of the previously forecast three cuts.
On this news the buoyant crypto market plunged once again, with Bitcoin falling back to the $67,000 support. Although the positive slant here is that this is higher than the $66,000 price level that was almost reached on Tuesday.
$66,000 line in the sand for miner profitability
Source: TradingView
The $66,000 price level does have a lot of significance. Mike Alfred, entrepreneur and value investor, posted on his X account on Wednesday that Bitcoin miners see this level as the bottom, given that they would be unprofitable at lower levels.
That said, it must be mentioned that price could still go below this line in the sand, but only the best performing miners with the most up to date rigs would be able to weather the storm.
Macro picture still looks great
Source: TradingView
On a more positive note, it’s always good to zoom out and look at how amazing the Bitcoin price chart looks from a higher macro level. All this sideways price action is building the base structure for the next move higher. A beautiful bull flag is still in the formation, and the likelihood of $BTC eventually popping out of this to the upside is very good.
If investors are getting cold feet because the $BTC price is too volatile now and again, then they are totally missing the point of holding this asset. Very few are able to trade $BTC successfully, but if you hold it over the long term, past data shows that you could do very well indeed.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
