The leading cryptocurrency gains from dovish Fed signals
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- Bitcoin price jumps for the week and breaks away from the $16,000 level.
- BTC enjoys tailwinds as the Fed has communicated that it will hike less aggressively.
- Markets are rallying and are set to see a Christmas miracle for their performance.
Bitcoin (BTC) price has seen bulls shooting out of the gates this week as a sudden wave of positive news swamped the markets. Not only is Germany near signing a decade-and-a-half deal with Qatar to ensure non-Russian gas supply, but equities also welcomed the less hawkish tilt of the Fed. With the end of 2022 in sight, the Christmas rally is rolling in as traders are gearing up for it. BTC itself could be seen hitting $19,000, bringing a 15% profit as a gift to end the year with, although there is one challenge remaining.
BTC bounces off crucial support yet again
Bitcoin price is recouping the losses it incurred at the beginning of November as traders are finally trading away from the low at $16,000. That comes as a sudden tilt in sentiment kicked in throughout this week, with the speech from Fed Chairman Powell as the cherry on the cake. Several tail risks that have exercised their bearish pressure on the price action are slowly but surely abating.
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BTC looks primed to continue its rally and could be seen hitting $19,000 possibly by the end of next week or the week after that if economic numbers keep confirming what Powell said. The only element in the way is the 55-day Simple Moving Average (SMA) on the weekly chart near $18,460. That could still trigger a rejection as it did in September and October, although the current bullish sentiment could easily be strong enough to trade beyond that point as tail risks deflate.
BTC/USD weekly chart
As the current rally is based on the communication from Fed Chairman Powell, the data could still point to a sticky and elevated inflation level. That would trigger a massive sell-off as the economic background is clearly not improving on inflation pressures. BTC would be slammed against that $16,000 level and flirt with fresh lows for 2022.
