September 23, 2023

Bitcoin Holds Above $23K Ahead of Next US Federal Reserve Meeting

The largest cryptocurrency, BTC by market capitalization, is trading at around $23,100, having risen by 0.1%. The start of 2023 for bitcoin, up over 40%, has been a stormy one. A week ago, BTC broke the $23,000 mark for the first time since mid-2022 and managed to stay in that territory.

This happened after the last report onPersonal Consumption Expenditure (PCE) showed a slowdown in inflation at the end of last year - the goal that the Fed is aiming for when raising rates. Currently, the CME FedWatch tool shows that the likelihood that the FOMC will raise rates by 25 basis points (0.25 percentage points) at the February meeting is approximately 99%.

Thanks to the recent broad market rally, leading crypto assets such as Bitcoin and Ether (ETH) have outperformed stocks this year:

  • ETH is up about 32%
  • CoinDesk Market Index - by 39%.
  • By comparison, the S&P 500 and Nasdaq Composite rose 6% and 10%, respectively.
  • Bitcoin and Ethereum have outperformed stocks so far this year.

    (CoinDesk) Joel Krueger, Market Strategistcrypto exchange LMAX Digital, said that from a technical standpoint, the price of BTC is currently overbought, as evidenced by the daily Relative Strength Index (RSI), which measures the magnitude of recent price changes. According to TradingView, the RSI indicator showed the level of 81.9 on Friday. (Readings above 70 indicate that the asset is overbought). The TradingView chart shows that the Relative Strength Index has been rising since mid-January. (TradingView) Krueger told CoinDesk that the next important resistance for BTC to watch is in the $25,200 area, based on its August peak. He does not rule out “the possibility of BTC falling $10,000 in the first half of the year” or rallying “above $50,000 in the second half of the year.”