Will the Fed stop raising interest rates? 5 things to know in Bitcoin this week

Bitcoin (BTC) starts another week in an unmistakable bullish position as it passes $28,000.

Crypto markets continue to climb on the back of the banking crisis, which is still raging in the US and abroad – where will they go next?

After a week of chaos for macro markets and solid gains as a result, Bitcoin and altcoins are around levels some haven’t seen in nine months.

The 2022 bear market feels like an increasingly distant memory as old resistance levels fall and bulls attempt to cement recently regained support.

This week, like last, there are all sorts of possible hurdles to overcome – the Federal Reserve will decide its next interest rate changes and new macroeconomic data will drop.

Markets are likely to remain volatile as a result, and further unexpected events from the banking sector will only add to the volatility.

At the same time, Bitcoin’s own ecosystem is set to be stronger than ever as the underlying network launches new records.

Cointelegraph takes a look at five of the key phenomena to keep an eye on when it comes to BTC price action in the coming week.

Fed rate hike cycle is in doubt

The macro event of the week is undeniably the March 22 Fed decision on rate hikes – or lack thereof.

The Federal Open Market Committee (FOMC) is facing a strong challenge to its current policy of quantitative easing (QT) in place for the past eighteen months.

The unfolding banking crisis has cast doubt on the Fed’s ability to keep raising interest rates, a policy that commentators say was the death knell for struggling regional banks.

The Fed is still caught between a rock and a hard place. Raising interest rates would keep inflation in check, but further punish the economy, possibly triggering a new wave of bank failures.

“Next week’s FOMC is shaping up to be one of the most interesting in a while, with no one really agreeing on what’s going to happen,” engineer and trader Tree of Alpha in summary.

“Odds leaning towards 25 bps, but that’s a wild card. Planning to long <=0bps og shorting >=50 bps as the safe bet.”

According to CME Group’s FedWatch Tool, consensus as of March 20 favored the Fed hiking by 25 basis points, rather than pausing hikes. The week before, Goldman Sachs had predicted interest rates would plateau, while Nomura even predicted a rate cut.

“This week sees the long-awaited March Fed rate decision. Currently, markets are pricing in a 62% chance of a 25 bps rate hike. However, markets also see a 100 bps rate cut by December,” says financial commentary, The Kobeissi Letter, wrote in part of the analysis on the roadmap for long-term interest rate increases.

Kobeissi and others also questioned how struggling bank stocks would react at the next Wall Street open, given the latest government moves over the weekend.

These included a buyout of Credit Suisse, the European banking giant that saw a particularly violent reaction to the US meltdown.

“Credit Suisse, $CS, was worth $10 billion a month ago and sold for pennies on the dollar,” Kobeissi continued about fellow bank UBS that bought Credit Suisse and got $100 billion in government liquidity.

“The government said $CS was ‘at serious risk of bankruptcy.’ A shareholder vote was bypassed. Regulators knew it was a matter of hours before bankruptcy. This deal was made out of desperation.”

Bitcoin spot price is looking at $30,000

With that, sentiment in the Bitcoin and crypto markets has understandably taken another turn for the better as the week begins.

At the time of writing, BTC/USD was trading above $28,400, according to data from Cointelegraph Markets Pro and TradingView.

Already at nine-month highs, the pair managed to fend off bears during a period of consolidation last week to return to target levels not seen in nearly a year.

Chief among these is $30,000, a psychologically significant level surrounded by significant historical liquidity. For monitoring resource material indicators and others, a key support level is holding the 200-week moving average (MA).

Popular trader Crypto Tony focused on $27,700 to support the bull case and the potential for a $30,000 attack.

“$27,700 ensured that we are now in the next range between $27,700 – $31,000. Using $27,700 as a level that bulls must hold to sustain a move up to the $30,000 level,” tweeted.

“Certainly an interesting week. My stop loss on my main long remains at $25,500.”

In recent analysis, meanwhile, Crypto Chase co-trades highlighted $28,500 as a potential short entry, while entertaining a “somewhat likely” bull case where sales only start above $33,000.

“Please note that I am not abandoning the idea of ​​28.5K~ shorts. These could still present a big opportunity around the FOMC this Wednesday. However, at the moment I cannot envision an immediate local top,” he explained.

“I think a rejection could occur there and I would still watch for the trade, but for those trying to hold a 28.5k short back to 12k could end up stopping in the 33k liquidity pool.”

Analyst heralds the end of the bear market

However, for some analyzing the long-term picture, Bitcoin has already broken out of a bear market in place since the decline from all-time highs and the start of Fed tightening in late 2021.

The weekly close came in at just over $28,000, making it Bitcoin’s highest since early June, 2022.

For trader, analyst and podcast host Scott Melker, known as “The Wolf of All Streets,” this has clear implications.

“The bear market is officially over,” he proclaimed on the basis of weekly chart data.

“$BTC made its first higher ($25,212) since all time high. It confirms a new bullish trend. The price may still go down, but it would be a new trend, not a continuation of the previous bear market. Congratulations everyone.”

Melker linked to a similar post from August 2019, just after BTC/USD had passed $13,000 in a comeback from the pit of the previous bear market.

Equally bullish on weekly timeframes is trader and analyst Rekt Capital, which continues to see a breakup of Bitcoin’s “macro downtrend.”

On quarterly time frames, Rekt Capital is surveillance a “bullish engulfing” event pending, which has triggered significant upside in itself in the past.

New All-Time Highs Due to Bitcoin Difficulties

In a classic move, Bitcoin’s network foundation refuses to abandon its trip to the moon.

The latest estimates from BTC.com and MiningPoolStats show that both hashrate and difficulty are in “just up” mode this month.

The difficulty is set to adjust upwards of 3.26% in the coming days, bringing it to nearly 45 trillion.

The hash rate reached a local peak on March 13th, but is now trending upwards again as miners react to the recent price action.

Among miners, however, there is a difference. On a rolling 30-day basis, miners’ BTC balances continue to decline, according to data from chain analysis firm Glassnode.

The most greed since the Bitcoin price was $69,000

There may still be reason to be fearful of the current bullish surge in Bitcoin and crypto more broadly.

Related: Bitcoin Levels to Watch as BTC Price Sees Weekly High in 9 Months

A look at sentiment data suggests that the majority of the market is becoming overconfident that the good times will continue.

The Crypto Fear & Greed Index, which uses a basket of factors to produce a normalized sentiment score for crypto, is now at 66/100, firmly in its “greed” zone and the highest since November 2021.

The warnings are confirmed by social media users. ONE examination from research firm Santiment, which received nearly 15,000 responses, shows that most believe that BTC/USD will break $30,000 as the next big crypto market event.

“Bullishness from the public doubles bearishness for crypto’s top 2 assets,” Santiment commented about the results.

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.