Following the release of the Fed rate hike decision, which is strengthening the US dollar and eventually causing a drop in BTC price, Bitcoin price prediction has turned bearish. Bitcoin price reached a high of $18,400 before a negative reaction. Now, BTC is trading close to a crucial support level, with a possible rebound if prices go over $17,550.
The global crypto market cap declined 1.42% to $857.98 billion on the previous day, as major cryptocurrencies plummeted early on December 15. The entire cryptocurrency market volume over the last 24 hours is $45.67 billion, a 14.40% decline.
DeFi’s total volume is currently $2.94 billion, accounting for 5.49% of the entire 24-hour volume in the crypto market. The overall volume of all stablecoins is now $53.26 billion, accounting for 99.53% of the total 24-hour volume of the crypto market.
US Fed Interest Rate Decision is Announced
On Wednesday, the Federal Reserve Board voted to raise interest rates by 0.5 percentage points, a lesser increase than in recent months. After an extraordinary year that included seven consecutive rate hikes as part of an aggressive push to try to bring down the highest inflation since the early 1980s, the central bank has decided to shift gears and raise rates.
The rate hike approved by the Federal Reserve on Wednesday was smaller than the four consecutive three-quarter point hikes approved at previous Fed meetings, but it was still twice as large as the central bank’s customary quarter-point increase, and it will likely worsen the financial damage for millions of American businesses and households by increasing the cost of borrowing.
Fed officials have decided to raise the rate that banks charge each other for overnight lending to a range of 4.25-4.5%, the highest rate since 2007.
The Federal Reserve also released its long-awaited Summary of Economic Projections, also known as the dot plot. These projections reveal where each of its 19 leaders expects interest rates to go in the future, and investors pay close attention to them for signals about the trajectory of rate hikes in the coming year and beyond.
The median “dot” for federal fund rates in December predictions rose to a new height of 5-5.25% from 4.5-4.75% in September, indicating a more aggressive tightening path for monetary policy. That would imply that the Federal Reserve Board now plans to raise interest rates by 0.5 percentage points, up from the previous projection made three months ago.
Bitcoin’s current price is $17,725, and the 24-hour trading volume is $26 billion. The BTC price has plunged nearly 0.20% since yesterday.
Despite having broken through a critical resistance level of around $18,150, Bitcoin is currently trading bearish. However, following the announcement of the Fed rate hike, Bitcoin fell below the $18,000 mark. This indicates that the selling trend could continue.
Leading technical indicators, such as the relative strength index (RSI) and the moving average convergence divergence (MACD), are currently positive, implying that Bitcoin’s price may rise after completing the Fibonacci retracement at $17,440.
The next major resistance level for Bitcoin is around $18,125, and a break above this level could lead to further gains and a price of $18,600.
On the downside, the level of $17,440 may serve as support for the price of BTC. This level has previously served as a barrier, and it is likely to maintain BTC’s bullish trend. A bearish crossover below this level, on the other hand, could lead to a drop in the price of BTC to the $16,850 level.
Compiled by Coinbold