Bitcoin (BTC) Price Breaks Below $30,000, Here’s Where It Could Be Heading Next
Bitcoin (BTC) price is largely unchanged in the mid-$29,000s on Friday.
The cryptocurrency found decent support earlier in the session when it briefly fell to test the $29,000 level and the 21-day moving average just above it.
But Bitcoin bulls appear to be taking a breather ahead of the psychologically important $30,000 level as key macro events, including a US Federal Reserve interest rate decision, loom next week.
US economic data released on Friday in the form of broadly as-expected but still fairly high core PCE inflation and Q1 Employment Cost Index figures were seen by the market as supporting an already widely expected 25 bps rate hike from the Fed next week.
That would take US interest rates to 5.0-5.25%, and markets are even moving towards pricing in a nearly 30% chance of another Fed rate hike at its next meeting in June.
But as banking crisis concerns remain front and center as First Republic enters FDIC receivership, most analysts expect a pause in the rate-hike cycle in subsequent meetings.
The Fed’s rate hike cycle has put the banking sector under tremendous pressure by 1) hitting the value of bank bond portfolios and 2) encouraging withdrawals into higher yielding money market funds.
As long as a Fed pause remains the baseline assumption, the macro shouldn’t be too much of a headwind for Bitcoin and the broader cryptocurrency market.
And if next week’s US jobs and ISM PMI survey data come in and boost bets on a US recession, that could bolster Fed rate cut efforts (even if the Fed continues to push back against the idea of a short-term rate cut cycle at next week’s meeting).
That could be a tailwind for Bitcoin and help it push back north of $30,000, provided the US dollar’s recent downtrend continues and US interest rates come under pressure.
Here’s where Bitcoin (BTC) could be headed next
Chart analysis suggests that the 2023 Bitcoin bull market remains very healthy.
Long-term bullish developments such as the golden cross in early February, the strong rebound from the 200DMA and realized price in March continue to encourage dip-buying behavior.
Meanwhile, the recent pullback from the 50DMA and Bitcoin’s positive response to the 21DMA on Friday suggest that near-term momentum is also still quite good – Bitcoin is up over 8.5% from the monthly lows set below $27,000 earlier this week .
Right now, the BTC price is trading in the upper half of a $26,500/$27,000 to $31,000 range that has been in play since mid-March.
However, macro developments permitting, a rally against resistance in the $32,500-$33,000 range and to new annual highs appears to be on the cards.
Beyond pure chart analysis, on-chain indicators and long-term analysis of Bitcoin’s market cycle provide additional reason for Bitcoin bulls to remain confident.
