🔥 Bitcoin BEARISH Interest Rate Reaction Explained
Yesterday I made an analysis on Bitcoin and my expectations on the FOMC interest rate hike. My expectation was that BTC would move towards the $18,2k - $18,5k area, congratulations if you took the trade.
As mentioned in my previous analysis, a confirmation on the market's expectations of the 2023 hiking cycle would be perceived as exceptionally bullish. However, we got a more hawkish (more hikes) FOMC than initially expected.
The above chart explains why. During the last meeting in September, the FED saw a 4.6% interest rate as the terminal rate in 2023. In the December meeting, the terminal rate has increased by 0.5% to 5.1%. So, the market is falling because we will get an additional hike of 0.5% which the market didn't anticipate beforehand. Similar story for 2024 and 2025.
As for Bitcoin, I'm expecting that we're going to lose the current bullish trend and will break out of the bullish channel on the downside. Short-term targets at $17,000 and $16,700. Wait for confirmed break out.
As mentioned in my previous analysis, a confirmation on the market's expectations of the 2023 hiking cycle would be perceived as exceptionally bullish. However, we got a more hawkish (more hikes) FOMC than initially expected.
The above chart explains why. During the last meeting in September, the FED saw a 4.6% interest rate as the terminal rate in 2023. In the December meeting, the terminal rate has increased by 0.5% to 5.1%. So, the market is falling because we will get an additional hike of 0.5% which the market didn't anticipate beforehand. Similar story for 2024 and 2025.
As for Bitcoin, I'm expecting that we're going to lose the current bullish trend and will break out of the bullish channel on the downside. Short-term targets at $17,000 and $16,700. Wait for confirmed break out.
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