The Fed Plunges Bitcoin to the Lowest Since June, Time for a Rebound?

© Reuters – Unsurprisingly, the Fed once again raised rates by 0.75%, reassuring those who feared a 1% rate hike, but did not prevent a bearish reaction from risk assets, including cryptocurrencies, a market dominated by .

The most important digital asset in the market in terms of capitalization has indeed fallen to its lowest level in more than 3 months following the decisions of the Fed, with a low at around $18,200.

Recall that the Fed’s rate hike was accompanied by some hawkish detail, especially regarding the FOMC members’ rate forecasts, depicted in the dot-plot chart. Indeed, forecasts imply that the Fed will raise its rates another 1.25% by the end of the year. Knowing that 2 more meetings will take place by the end of 2022, rate increases of 0.75% then 0.50% are the most likely scenario.

Furthermore, Jerome Powell maintained a largely hawkish tone in his press conference, leaving no doubt that the Fed will continue its fight against inflation until it is under control.

However, for Bitcoin as for risky assets in general, this is a powerful bearish factor. On the other hand, Bitcoin didn’t go so far as to hit new yearly lows yesterday, and with a 2% 24-hour drop at the time of writing, the Fed’s bearish impact on Bitcoin remains limited, which could suggest that a near rebound cannot be ruled out.

Technical thresholds to watch on Bitcoin

From a graphical point of view, last night’s low around $18,200, coupled with the psychological threshold of $18,000 should be considered as the first support near current prices. Then, the June 18 low at $17,611 will come into play. Below this threshold, the next potential support will then be directly at the $15,000 threshold.

On the upside, a return above $20,000 will be the first step in hoping for a sustainable rebound in Bitcoin. However, to question the underlying downtrend visible since the November 2021 record, it is the $24-25,000 zone that will have to be crossed.

Indeed, above this zone, the BTC/USD will have confirmed the crossing of a downward trend line that has guided the evolution of the cryptocurrency for almost a year.

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