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The technical chart for Bitcoin shows a bullish signal hinting that the BTC price can extend further rally all the way to $35,000.
Bitcoin and the broader cryptocurrency market are currently holding up with their gains over the last weekend and earlier this week. As of press time, Bitcoin (BTC) is trading 2.0% up at a price of $28,141 and a market cap of $543 billion, on the other hand, Ether (ETH) too is up by 3.48% and is currently flirting around the $1,800 level. Investors are keeping a close watch on the latest policy decision that will come out of the Fed’s meeting by Wednesday afternoon. As per the broader market consensus, the US central bank is likely to raise interest rates by 25 basis points.
As per the CME Group’s FedWatch tool, there’s an 83% chance of a quarter-point increase by the Fed. However, the rest 17% believe that there will be no hike, and the Federal Reserve might start easing its monetary tightening campaign amid growing fears of major financial contagion.
Some investors have attributed the recent rally in the Bitcoin price and the broader crypto market to confidence within the traditional banking players’ dwindling. Thus, many believe that the persistent inflation and the Fed policy could provide a major stimulus to Bitcoin and crypto.
The Bitcoin price is already more than 21% this month of March so far. It has outperformed the US equities and other inflationary hedge assets like Gold. Since the beginning of 2023, the Bitcoin price has surged by more than 70% so far. Speaking to CNBC, BTIG’s Jonathan Krinsky said that Bitcoin has been “a beneficiary of the banking issues,” but that it’s “showing upside exhaustion signals on both daily and weekly timeframes, and into what should be very heavy resistance in the 28k-30k range.”
Will Bitcoin Extend the Price Rally Further?
Amid Bitcoin’s recent strong performance despite the banking crisis, many view it to be a strong hedge. Furthermore, many also believe that Bitcoin will benefit from the looser monetary policy that the Fed might undertake to prevent a banking crisis. In this case, Bitcoin will act as a strong hedge against inflation.
During her recent interview with Bloomberg, Ark Investment Management’s Cathie Wood said:
“The behavior of the price through this crisis is going to attract more institutions”.
Bitcoin’s revival in 2023 has already added more than $390 billion to the crypto market. The world’s largest crypto has strongly weathered US regulatory crackdown, crypto bankruptcies, and other macro events.
Some market analysts believe that the Bitcoin (BTC) price can even extend gains beyond $30,000. On the technical chart, Bitcoin has formed a reverse head-and-shoulders, often viewed as bullish. Thus, the BTC price can extend gains up to $35,000.
“With interest-rate markets gone from pricing in rate hikes to pricing in rate cuts, there is now a gentle tailwind supporting Bitcoin,” wrote Tony Sycamore, market analyst at IG Australia Pty.