Bitcoin (BTC), which hit daily lows, rebounded strongly on March 2, as macro volatility was heightened by comments from the United States Federal Reserve.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Powell: Powell expects a March rate increase to be “appropriate”.
Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD dropped to $43,350 on Bitstamp just before the Wall Street opened on March 3.
Trading resumed and the pair was back above $45,000 as a result.
Following the release of a new statement by Fed Chair Jerome Powell (for the first time giving concrete notice of a key rate increase coming this month), volatility ensued.
He said, “Our monetary policies have been adapting to changing economic environments and they will continue to do so.”
“We have stopped buying net assets. We expect that with inflation at 2% and a strong labor force, it will be appropriate for us to increase the target range of the federal funds rate at our meeting this month.”
Although the market had long priced the increase in price, there were still questions about the magnitude of the hike and what other increases could be expected in 2022. Powell said that the Russia-Ukraine conflict could have “highly uncertain” effects on the U.S. economy.
Bitcoin reacted positively to the news and rose to just under $45,000.
Analyst and trader Rekt Capital was optimistic, because BTC/USD was in a gap in order books. This could trigger a run to $48,000, which would be the next area of sell side resistance.
It was also of interest to see if the 50-day exponential moving mean (EMA) could be flipped for support.
#BTC continues to hover below the blue 50-week EMA Breaks beyond this EMA have preceded immense upside Turn this Bull Market EMA into support and we’ll see the Bull Market resume$BTC #Crypto #Bitcoin pic.twitter.com/neXcP6lUHs
— Rekt Capital (@rektcapital) March 2, 2022
“A scenario could be we’re going ups again on Bitcoin, trap the shorts and take the liquidity to go back down towards $42 000,” Michael van de Poppe, a Cointelegraph contributor, said in a separate forecast for the day.
“We also have massive resistance at $46,000 which I doubt we can break in one hit.”
LUNA gains signify a return to $100 all time highs
Altcoins were stable elsewhere, with Ether, (ETH), looking to retake $3,000 once more.
Related: Bitcoin analysts look at crucial levels to hold BTC after it reaches $45K; Ethereum $3K
Terra (LUNA), the standout among the top ten cryptocurrencies according to market capital, continued a winning streak that saw it reach $100 following its initial rejection at start of year.
Van de Poppe stated that the total crypto ecosystem’s value is doing very well.
“It lost only approx. The market has been falling heavily for the past few months and it only lost 10%-15% of its $USD value. DeFi will likely lead the next phase of the bull market.
LUNA/USD 1-day candle charts (Binance). Source: TradingView