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Bitcoin price finally breakout above the $16.5k level today after struggling near the level for many days. The BTC price hit a high of $17,021, rising almost 3% in the last 24 hours. While on-chain data and crypto analysts expect Bitcoin to record more gains, resistance remains much stronger at $18k.
Moreover, Fed Chair Jerome Powell’s speech to impact the markets today as a hawkish stance could mean pushing the economy into recession. Experts believe the Federal Reserve to continue rate hikes to tame inflation in 2023.
Is Bitcoin Price Really in Bull’s Control?
Bitcoin price saw significant gains on Wednesday, November 30 as a result of short covering by traders at the end of the month. The BTC price tops $17,000 but analysts expect the price action will be slow from here. “It’s just a bear market rally.”
According to Spent Output Profit Ratio (SOPR) on-chain data, short-term participants continue to sell in losses with SOPR of less than 1. The lack of positive sentiments makes $18k a strong resistance level. In fact, $18k is the average cost of entry for short-term participants.
Moreover, traders need to be careful once $18k is reached as yield curve inversions often precede recessions and the current 10-year Treasury rate (3.75%) is below the 3-month rate (4.22%).
Long-term investors of Bitcoin are still at loss and it’s tough for long-term holder SOPR to turn back to a positive trend anytime soon. Therefore, short-term SOPR becomes a more informational and dynamic metric compared to aSOPR/SOPR under current conditions.
Crypto analyst Michael van de Poppe predicts Bitcoin price can continue to rally toward $18.3k if it holds the local support at $16.6k. Michael van de Poppe earlier pointed out that Bitcoin price has reached the previous bear markets bottom where the price generally starts to rise.
Fed Chair Jerome Powell’s Speech to Drive Market Dynamics
Wall Street and Crypto Market to carefully observe Federal Reserve Chair Jerome Powell’s speech at the Brookings Institution on Wednesday for clues about the Fed hawkish or dovish stance in the coming year. Moreover, Fed slowing the rate hikes in the coming FOMC meetings could mean bullishness for stocks and crypto.
Elon Musk has also raised concerns over the need for the Fed to cut rate hikes immediately to prevent recession risks.
“Trend is concerning. Fed needs to cut interest rates immediately. They are massively amplifying the probability of a severe recession.”
Bitcoin and Ethereum prices are currently trading at $16,872 and $1,268, respectively ahead of Powell’s speech.
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