Federal Reserve Divided on Interest Rate Hikes

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Last week, the cryptocurrency marketcap experienced a slight decline of 0.71%, moving from a market capitalization of $1.117 trillion to $1.109 trillion. The pullback in US indices continue to be more than crypto markets. With luke warm to weak earnings, US indices are struggling to maintain any good sustainable upside move. The markets started trending downwards last week in anticipation of hawkish or newer stances emerging from the FOMC meeting minutes. The release of the meeting minutes had a mixed commentary and reaction to markets, but overall a brief recovery was seen in market as no unexpected commentary was seen. As of today the Fed members have 2 major stances . The first being a need for higher interest rate hikes and the other set believing on a wait and watch approach. Both views have strong set of arguments behind them, but the markets need consistent positive data to show any substantial move from here. Crypto markets have been deceoupling from US indices lately which is healthy for the ecosystem as a whole. In short term, BTC is facing a big resistance from the $25,300 region. This is a crucial zone as it has been trying to break through for a decent time now.

Kunji research bitcoin analysis
Kunji Research bitcoin analysis

Bitcoin Price Analysis:

Bitcoin increased by over 10% last week and is currently trading close to the $25,000 psychological resistance level. For the past four days, it has been trading in close proximity to the $25,300 strong overhead resistance. The bulls are still in it even though the bears have successfully defended the level. Once more seizing the chance, they attempted to break above the $25,300 yesterday. As Asia’s business day gets underway, Bitcoin, which has decreased 2% over the past 24 hours, fell below $24,000.

Kunji research bitcoin analysis

However, as Asia’s business day officially begins, Bitcoin has fallen below $24,000, losing 2% over the previous 24 hours. If the downward trend persists, the first support level is at $23,500, followed by $22,600. To stop the bullish momentum, sellers will need to quickly drag the price below this support. At that point, the pair might drop to $21,300. However, if the price rises above $25300 and holds there, the BTC/USDT pair may gain momentum and quickly approach the $27,000 price level.

Fundamental Updates

The FOMC meeting minutes released on 23rd Feb showed the divided stance two groups of Federeal Reserve currently hold. As the stances weren’t something that the markets weren’t already expecting, a brief relief was seen across the markets. The major tussle now is around the severity of the hikes and for how long they’ll stay high. Recent development indicate towards a longer period of higher rates than previously anticipated by the markets. The next and significant indicator that the Federal Reserve will be watching is the core PCE data that’s scheduled to release on Feb 24th.

Federal reserve data

The Core PCE has been cooling down slowly in both magnitude and velocity terms . The projection for the data release is expected to mark in at 4.3. Any severe data to the higher side can cause caution and slight pullback across the markets as this is one of the main data pointers that Fed draws it’s final decision from along with other macro economic data points.

Kunji research crypto market outlook

Bitcoin returns were -0.82% for this week. The Alpha Blue Chip Focused Strategy returns were 7.59% during the same period (16 FEB – 23 FEB). The Top Cap Digital Assets Strategy and Arbitrage and Balanced Opportunities Strategy returns were 1.68% and -0.48%, respectively.

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