Bitcoin price gave up early gains after Powell’s hawkish comments
As AZCoin News reported, Bitcoin price spikes to an intraday high at nearly $39,000 as Fed leaves rates unchanged. But, it fell back below $36,000 after the U.S. Federal Reserve released a statement about reducing the size of its balance sheet. At the time of writing, BTC is changing hands at $35,836.
BTC/USD 4-hour chart | Source: TradingView
Bitcoin price oversold bounce faces resistance at $40,000 – $43,000
Bitcoin experienced sharp price swings on Wednesday along with most traditional assets. The spotlight was on the U.S. Federal Reserve, which started after its two-day meeting that it will soon be appropriate to raise the target range for the federal funds rate.
The latest Fed decision comes as the central bank has been winding down its asset-purchasing program. Monetary stimulus has been an important source of market support, which underpinned the rise in equities and cryptocurrencies over the past year. BTC reversed earlier gains shortly after the Fed announcement. The recent bounce occurred on low conviction among buyers.
Bitcoin rose from deeply oversold levels over the past two days, indicating renewed buying after a sharp sell-off. The cryptocurrency faces initial resistance at $40,000 – $43,000, which could stall the current price bounce.
The Relative Strength Index (RSI) on the daily chart is rising from extreme oversold levels, which could keep buyers active this week. On the weekly chart, the RSI is approaching oversold territory, similar to July 2021, which preceded a strong price rally.
Still, momentum signals remain very weak, indicating limited upside from here. That means buyers will need to make a decisive move above $40,000 to signal a recovery phase. For now, the downtrend from November remains intact, with immediate support at $37,000 and lower support at $30,000.
“DeFi assets, like most of the cryptocurrency, are volatile currently. The amount of utility correlated with YFI, SUSHI, AAVE, and COMP has played a role in their inevitable corrections. Read what our divergences are showing for their futures”, Santiment stated.
At the time of publication, Ether, the second-biggest cryptocurrency by market capitalization, was trading over $2,386 and was down slightly during the same period.
The overall cryptocurrency market cap stands at $1.621 trillion, and Bitcoin Dominance is 42%.
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