Bitcoin (BTC) rallied to key resistance until February 8 as crypto markets received a boost from a familiar source.
Powell: “Disinflationary Process” is here
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reached the important $23,400 area on Bitstamp overnight.
The pair reacted positively to the latest comments from the US Federal Reserve, which also served to send stocks higher during the Wall Street trading session on February 7.
Fed Chairman Jerome Powell again mentioned “disinflation” during his speech, bolstering market hopes that interest rate hikes could cool more quickly in line with inflation. These came out of the last Federal Open Market Committee (FOMC) meeting on February 1, where the Fed raised rates by 0.25%.
“The message that we sent out at the FOMC meeting last Wednesday was really that the disinflation process, the process of bringing inflation down, has started, and it’s started in the goods sector, which is about a quarter of our economy.” , said. saying at the Economic Club of Washington, D.C.
However, Powell warned that there was “a long way to go” and that the United States was in “the early stages of disinflation.”
Despite this, risk assets were up at the close on Wall Street, with the S&P 500 and Nasdaq Composite Index finishing up 1.3% and 1.9%, respectively.
Bitcoin also erased previous weakness, having dipped below $22,700 earlier in the week, but the bulls proved unable to address the demand for liquidity at $23,400 and above.
That liquidity held up throughout the day, as seen in data covering the Binance order book. supplied per chain monitoring resource Material indicators.
“Markets rallied to close yesterday, with Bitcoin’s latest H4 candle showing weakness at resistance and printing a shooting star,” popular trader Mark Cullen summarized about the latest events.
“Personally, I am still waiting for the minimums to be removed. BUT if BTC can close H$ above 23.4ki it will look for momentum higher.”
Crucial area held for #Bitcoinso we should look for the continuation.
The game plan is simple;
– Crack $23.3K and we will see new highs, the correction is over.– Lose $22.6K and I’ll be looking for $21.5-21.7K for longs in #Bitcoin. pic.twitter.com/xJp6iSbeQb
—Michael van de Poppe (@CryptoMichNL) February 8, 2023
Michaël van de Poppe, founder and CEO of trading company Eight, was also encouraged by the Bitcoin reaction. A turn of $23,300 to stronger support, he told Twitter followers that day, would mean that the latest BTC price correction “is over.”
BTC/USD was trading around $23,200 at the time of writing, and traders are still counting down for volatility to return.
gold cross vs. death cross to solve in “a few days”
Looking ahead, the rest of the week held few major macroeconomic signals for the crypto markets.
Related: Bitcoin Takes ‘Lion’s Share’ As Institutional Inflows Hit 7-Month High
As Cointelegraph reported, eyes were already on next week’s inflation data, which comes in the form of the January Consumer Price Index (CPI) printout.
At the same time, chart analysts expected a positive result from Bitcoin’s latest “golden cross” on the daily chart, the first since September 2021. At the same time, however, the weekly BTC/USD time frames continued. printing a “cross of death”. “a phenomenon that often preceded a larger decline in the past.
“Many say Death Cross/Golden Cross Lagging Indicator. It is lagging behind for those who only think that Golden Cross means bullish, and Death Cross means bearish. I use this indicator to understand Momentum,” wrote fellow trader Jibon in part of a dedicated Twitter thread on the subject on February 7.
Jibon compared the current setup to previous instances in 2015 and 2019, adding that it would take “a few days” for the impact of the crossovers to become more apparent.
The views, thoughts, and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
