Bitcoin Price Levels to Watch as Fed Rate Cut Hopes Fade
As we navigate the unpredictable world of cryptocurrencies, market volatility has become a constant companion. And with the Federal Reserve’s shift in monetary policy, Bitcoin’s (BTC) price has been vacillating between hope and despair. In this article, we’ll examine the key Bitcoin price levels to watch as Fed rate cut hopes fade.
The Impact of Trump’s Tariffs
The recent developments surrounding Trump’s tariffs have sent shockwaves through the financial markets. Bitcoin’s price failed to break above the $86,000 resistance level on April 16, as Fed Chair Jerome Powell expressed concerns about the impact of Trump’s tariffs on the economy. The tariffs could drive inflation, slow growth, and create a challenging scenario for the Fed’s dual mandate of stable prices and maximum employment.
According to Polymarket bettors, there is an 88% chance that interest rates will remain between 4.25% and 4.50%. This leaves just a 10% probability of a 0.25% rate cut. However, a common market belief is that any bearish price action from unchanged interest rates is already priced in.
Interest Rate Expectations
Powell’s speech highlighted the risks of Trump’s tariffs, which could lead to higher inflation and slower growth. This means the Fed may maintain a restrictive policy to ensure inflation doesn’t persist. If this is the case, Bitcoin’s price may remain stuck in a tight range on the lower time frame (LTF) of the 4-hour chart.
What’s Next for Bitcoin?
Many analysts and traders are wondering where Bitcoin’s price is headed next. One key area of interest lies between $86,000 and the previous range lows at $74,000. A loss of the 200-day exponential moving average (purple line) at $87,740 would undermine the bullish case for BTC/USD.
Key Bitcoin Price Levels to Watch
For Bitcoin to hit new highs, it must flip the $86,000 resistance level into support. Above that, there is a major supply zone stretching all the way to $91.240, where the 100-day SMA sits. Bulls will also have to overcome this barrier in order to increase the chances of BTC’s run to $100,000.
Conversely, the bears will attempt to keep the $86,000 resistance in place, increasing the likelihood of new lows under $80,000. A key area of interest lies between $76,000 and the previous range lows at $74,000, i.e., the previous all-time high from March 2024.
The True Bottom
Onchain analyst James Check points out that Bitcoin’s true bottom lies at its “true market mean” – the average cost basis for active investors – around the $65,000 area. If the bulls fail to mount a defense in the $75,000 zone, the next step would be a retest of the US election day price of $67,817, erasing all the gains made from the so-called Trump pump.
Disclosure
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
