Bitcoin maintains $40K support as Fed confirms rate hike in 4 years

Bitcoin (BTC), which was $40,000, held $40,000 as of March 17. This came after a Federal Reserve key interest rate increase.

BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView

Inflation comments: Fed singles Ukraine war out

Data from TradingView and Cointelegraph Markets Pro showed that BTC/USD rose to $41,500 local highs after the Fed announced that it would increase rates by 25 basis points, to 0.5%. This is the first such move since 2018.

The Federal Open Market Committee (FOMC), voted nearly unanimously in favor of the raise. A statement accompanying it warned that inflation will continue to rise due to “upward pressure” from the war in Ukraine.

It stated that Russia’s invasion of Ukraine was causing great economic and human hardships.

“While the implications of the invasion on the U.S. Economy are uncertain, in the short term it is likely that the invasion and other related events will create additional upward pressure on inflation. This will impact economic activity.”

The FOMC reiterated that there would be more hikes and that the Fed would reduce its asset holdings to lower its record-high balance sheet.

The statement also mentioned possible future policy changes.

Bitcoin surged higher overnight after its initial bullish reaction. It was still at $41,000 as of this writing.

Michael van de Poppe (Cointelegraph contributor) felt that the $40,000 area was crucial to turn to support.

He told his Twitter followers that the market had shown a positive reaction and broke through $39.6K.

“Next, we will need to see if we can break the $42K barrier. This would allow us to reach the $46K barrier. It is crucial to keep the $39.6K Bitcoin area.

These levels were well-established as rungs on a ladder that spans Bitcoin’s 2022 trading range of $33,000 to $46,000. An analyst this week said that any move beyond the top or bottom boundary would not be significant.

China promises continue to gain ground in sia markets

Traditional markets also showed optimism, with China boosting a return for Asian equities and promising favorable policy changes.

Related: Ukraine’s President Signs Law Establishing Cryptocurrency Regulation Framework

Holger Zschaepitz, commentator summarized: “Hang Sang Tech Index leaps 7.8% to extend the recovery after Beijing capitulated in to mkts.”

“In the past, China didn’t care if foreign investors couldn’t invest in China. It does require capital and it doesn’t need to collapse. On Wed, word spread that China was becoming mkt-friendly.

The upside of gold was also promising. It reversed some of its decline from previous highs over $2,000.

1-Day candle chart for XAU/USD Source: TradingView