We have passed another meeting of the Federal Reserve and Powel, the chair, declared that the members of the FED decided to keep the interest rates stable to observe the current state of the economy and the activities on the labor market as well as the situation in the inflation.
During the meeting, the markets were not wildly volatile and the stable interest rates was a narrative that was already bought / sold by the market. Thus, it did not have an immediate impact on the market as Powel stated before his speech. In Powel's speech, some critical points were being highlighted.
The retail investors are concerned about the government's spending and the growing avalanche of debt in the U.S. While the chair of FED emphasized that they will watch the economic outlook closely, the expectation is having a better tightening is required to increase the efficacy.
Overall, the crypto ecosystem is happy with the stable interest rates and the speech of Powel did not have strongly hawkish messages to destroy the markets. As he mentioned earlier, the FED will be cautious about the data and the dream of 2% is still the priority.
Bitcoin is traded above 33K and I think this is a very crucial price range to keep in minds while trading crypto.
Below 33K, the outlook of the ecosystem would be very different and the bears may, once again, dominate the market. Yet, as the crypto investors are optimistic about the upcoming Bitcoin ETFs and the inflation pushes people to put their money into an asses while the U.S. dollar is losing its purchasing power, the markets got the attention that they needed.
From that time on, the focus of many investors will be finding a good spot to take profit before the correction of this upward move.
Many investors expect 40K, which is also a strong resistance and psychological level, to cash out but I do not think the price will hit and stay at that level for a very long time. There will be several short positions and the market maker would not be in favor of leaving the liquidity behind before a correction. Some "highly volatile" days might be around the corner.
$1.393T is a very strong resistance level and if the prices of cryptocurrencies drop back to the levels that the market cap was $1.14T would not be a big surprise.
To have a very bullish sentiment, we need to see that the market cap will go higher than $1.4T with a massive breakout. Otherwise, the current volume in crypto is too limited and there is not enough power to break that wall in the global trend.
The current interest rate in the U.S. is at the highest level over the last 22 years. We should not forget the fact that while economies are tightening, there is no sustainable money inflow to crypto ecosystem. Thus, it is better to consider the current state of the global trend, especially the policies of the central banks such as FED, BOJ and ECB, before taking a long term action.
Markets always go up and low, the strength and the contribution of long lasting narratives decide on the directions. Now, I frankly believe that we are in a temporarily green market which is slowly running out of fuel. So, I am adjusting my "exposure" to the bullish and bearish sentiments.
What do you think about Powel's speech and the decision by the FED?
Share your ideas 👇
Happy LPUD
Hive On ✌🏼
