Federal Reserve (FED), the worst-case scenario is avoided! What consequences for Bitcoin?


The monetary policy decision of Wednesday March 20 was eagerly awaited by high finance and by investors in cryptocurrencies. Jerome Powell yesterday updated the FED's global-macro outlook, the opportunity to take stock of what is still the key factor for the current crypto cycle.

The issue of the timing and number of FED rate cuts this year

Jerome Powell's FED therefore unveiled a new monetary policy decision yesterday with a status quo in terms of key rates, and especially the update of the FED's global-macro projections as well as central forecasts for the evolution of the FED funds rate this year.

The FED was eagerly awaited in its reaction to the slowdown at the start of the year in the rate of disinflation and to weaker than expected US macroeconomic statistics, 2 factors which led the market to revise downwards its timing expectations. of the FED's pivot and the number of FED funds rate cuts by the end of the year.

Following the FED's announcements last night, here are the new market expectations regarding the outlook for monetary policy according to swap traders on the FED funds: institutional investors now anticipate 3 rate cuts with a pivot at the meeting on Wednesday, June 12. Note that 6 rate cuts in 2024 were expected in January.

👉 How to buy Bitcoin easily? follow the leader

The FED therefore first updated its own expectations in terms of the Federal funds rate, this was by far the dominant fundamental factor most expected by traders, and Jerome Powell satisfied the markets by confirming that there will indeed have a pivot this year and 3 rate cuts by December 2024.

The FED then updated its inflation expectations, with a particular focus on the PCE price index in the underlying version (core PCE inflation, which integrates services more than the CPI; remember that the economy US is an 80% service economy and the US Central Bank still seems confident in its ability to bring core inflation down to 2% by mid-2025.

For the FED, the most important thing is to have confidence in a return of core PCE below 2%. It is currently at 2.84% and it will be updated during the stock market session on Friday, March 29.

It is imperative for the FED that this disinflation is not forged on an economic recession, that is to say that the long-term unemployment rate does not exceed 4.1% of the active population. For the bullish cycle of the crypto market, this combo of disinflation with the economic soft landing is at least as important as the halving to allow the upward momentum in crypto prices to further develop.

US macro and the FED's monetary policy must therefore remain central in the analysis of crypto trends.

FED Dot Plot

Graph representing the number of rate cuts considered by voting members of the FED (dot plots)

Buy cryptos on eToro
Investing in cryptocurrencies is offered by eToro (Europe) Ltd as a PSAN registered with the AMF. Investing in cryptoassets is very volatile. There is no consumer protection. Investing is risky (learn more)

👉 Also find Vincent Ganne in video on the Cryptoast Research YouTube channel:

Bitcoin is still building its wave 4 on a technical level

Volatility made a comeback after the price of Bitcoin reached its all-time high (ATH) for the month of November 2021. Never in its history has the pattern reached its ATH several weeks before the halving. Combined with a bullish excess of momentumthe market had to enter a correction sequence.

The BTC correction period triggered last Thursday by the US inflation figures (confirming in passing the strong impact of the US macro on the Bitcoin price trend) is fully part of a classic graphic pattern with the point of start of a wave numbered 4, the one which comes as a retracement of the vertical upward impulse between the end of January and the middle of March.

📈 You want to have Vincent Ganne's trading opinion on Bitcoin every morning as well as his best configurations on altcoins, then join the professional Cryptoast Research service! Satisfied or refunded for 15 days, so don't hesitate!

In terms of so-called Fibonacci retracement ratios, a bottom was expected around the 38.2% retracement ratio, or between $57,000 and $60,000 depending on whether we use an additive scale or a logarithmic scale. The price of Bitcoin actually rebounded yesterday from 60,000 US dollars, so we must now cross resistance to restart the upward dynamic.

It is the resistance at $69,000 that must be overcome again to restart the basic upward trend in BTC.

Chart showing weekly Japanese candles (left) for the BTC/USD price

To deepen my technical analyses, find me on the Cryptoast Research YouTube channel!

Find technical analyzes from Vincent Ganne on Cryptoast Research, the ideal place to make your investments in cryptocurrencies successful. You will learn how to position yourself on strategic price levels, spot investment opportunities and anticipate price movements. Join us now and take charge of your crypto investments.

Cryptoast Research: Don't waste this bull run, surround yourself with experts

Newsletter 🍞

Receive a summary of crypto news every Monday by email 👌

What you need to know about affiliate links. This page may feature investment-related assets, products or services. Some links in this article may be affiliated. This means that if you buy a product or register on a site from this article, our partner pays us a commission. This allows us to continue to offer you original and useful content. There is no harm to you and you can even get a bonus using our links.

Investments in cryptocurrencies are risky. Cryptoast is not responsible for the quality of the products or services presented on this page and cannot be held responsible, directly or indirectly, for any damage or loss caused following the use of a good or service highlighted in this article. Investments related to crypto-assets are risky by nature, readers should do their own research before taking any action and only invest within the limits of their financial capabilities. This article does not constitute investment advice.

AMF recommendations. There is no guaranteed high return, a product with high return potential involves high risk. This risk-taking must be in line with your project, your investment horizon and your capacity to lose part of this savings. Do not invest if you are not prepared to lose all or part of your capital.

To go further, read our Financial Situation, Media Transparency and Legal Notices pages.

Related Posts

$9.5 billion options expire this Friday

8:29 a.m. ▪ 3 min reading ▪ by Fenelon L. This Friday, crypto derivatives exchange Deribit is preparing to experience one of the largest Bitcoin options expirations…

Towards a bitcoin supply crisis?

2:00 p.m. ▪ 4 min reading ▪ by Luc Jose A. While the wind of the resumption of its upward momentum is still making people happy, there…

A drop below $50,000 before the Bull Run?

Wed 27 Mar 2024 ▪ 3 min reading ▪ by Eddy S. Bitcoin, the cornerstone of the cryptocurrency market, is facing unprecedented turmoil in 2024. CryptoQuant CEO's…

the halving is less than a month away, what will change?

It is the most attended event in the crypto ecosystem. The Bitcoin (BTC) halving is fast approaching, and it is generating its share of hope and transformations….

woman arrested in possession of 2 billion pounds (GBP) of cryptocurrencies

It is the largest cryptocurrency seizure in UK history. A woman has just been found guilty of setting up a vast money laundering enterprise, which used several…

ETNs are coming soon to the London Stock Exchange

The London Stock Exchange (LSE) announced on Monday the upcoming arrival of Exchange Traded Notes (ETN) Bitcoin (BTC) and Ethereum (ETH) on its Exchange. What are the…

Leave a Reply

Your email address will not be published. Required fields are marked *