Short-Term Relief Bitcoin Rally Likely After ‘Optimistic’ Powell, Major Bottom Could be Forming – Analysts
Bitcoin (BTC) and the broader crypto market went into a relief rally over the past day, after an expected 0.5 percentage point rate hike in the US and an “optimistic” outlook from US Federal Reserve (Fed) Chair Jerome Powell. According to one analyst, a major bottom could now be forming in crypto markets, while others argued that a relief rally could be short-lived.
Despite being larger than previous rate hikes, Wednesday’s move by the Fed to raise rates by 50 basis points was widely expected by the market. Uncertainty was instead focused on what the Fed would say about future hikes, with some fearing a 75-basis point hike at the Fed’s next meeting.
According to Marcus Sotiriou, an analyst at the digital asset broker GlobalBlock, the relief rally seen in bitcoin and other cryptoassets following Wednesday’s rate hike in the US came “as expected.”
Writing in an emailed commentary on Thursday, Sotiriou said that,
The market had “clearly priced in this bearish event during the weeks leading up to the FOMC [Federal Open Market Committee] meeting […].”
He added that Chair Powell appeared “optimistic” in the press conference with his remarks about a possible inflation peak in March.
Importantly, Powell also took the opportunity to dismiss the idea of a feared 75 basis point hike at the Fed’s next meeting, Sotiriou said, arguing that this will likely “allow the crypto market to rally in the short-term.”
Meanwhile, according to Bloomberg Intelligence Senior Commodity Strategist Mike McGlone, the current market environment with falling volatility in crypto and bitcoin versus several traditional markets is proof of adoption and that the institutional involvement in crypto is “gaining momentum.”
In his latest crypto market outlook, McGlone
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