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Investing.com – The rose significantly higher yesterday, hitting a daily high of $24,560, and remains well oriented on Tuesday morning, suggesting the possibility of new yearly highs imminent.
Recall that Bitcoin is largely benefiting from the decline in Fed rate hike expectations, due to several recent news and statistics.
The rout of American banks benefits Bitcoin
Indeed, the rescue of SVB and Signature Bank by the US government last weekend greatly reduces the Fed’s room for maneuver in terms of raising rates, if it does not want to further stress the financial system.
Some cryptocurrency enthusiasts have also pointed out that these bank failures highlight the flaws of the traditional financial system, highlighting bitcoin and cryptocurrencies in general, which were originally created to compensate for the flaws and perversions of the traditional finance.
This reasoning is supported by the fact that Bitcoin continued to rise during the day yesterday, as US regional bank stocks tumbled on fears of contagion.
It should also be noted that in the current context, full of uncertainty regarding stablecoins, their reserves and the future that regulators foresee for these assets, Binance announced yesterday that it will convert its support fund to the crypto market worth $1 billion BUSD in native cryptocurrencies such as Bitcoin and , which also supported cryptos yesterday.
Economic data also argues for a looser Fed
Note that the Fed’s rate expectations were also pushed down by the latest major economic statistics. For example, last Friday’s NFP report showed wage growth below expectations, good news in the fight against inflation.
Thus, the 50 basis points for the FOMC meeting on March 22 has now fallen to 0% (from almost 80% a week ago), with the market now pricing in a 72.3% probability of a rise. limited to 25 points, and even a 27.7% probability that the Fed will finally decide not to raise rates.
But just as the Fed’s 2022 rate hike was one of the main catalysts for the Bitcoin bear market, the prospect of the Fed halting the rate hike is a bullish factor for cryptocurrencies.
US CPI in focus for Bitcoin traders on Tuesday
In this context, the new estimate of the US CPI for the month of February expected on Tuesday afternoon will have to be watched very closely. Better-than-expected numbers could increase the risk of a more aggressive Fed.
In this case, Bitcoin should advance. On the other hand, below-consensus numbers could have a limited impact on BTC, given little room for further downside in rate expectations.
Find economic data results the moment they are released on the Investing.com Economic Calendar
Technical thresholds to monitor on the
From a graphical point of view, it should be noted that the BTC/USD sent two bullish signals yesterday, crossing the threshold of $22,000, as well as the 50-day moving average ($22,983), then $23,000 and $24,000.
At this point, the next target is the area formed from the major psychological threshold of $25,000 and this year’s high near $25,250. Then, few obstacles will stand in Bitcoin’s way before $28,000 and then $30,000.
On the downside, $24,000 and $23,000 are the first potential supports. Lower, the Bitcoin profile would become more corrective again.