Why Bitcoin (BTC/USD) rose to $17K. Here is the potential price action next
Bitcoin rose on Thursday after Powell’s statement indicated slower rate hikes.
BTC price has recovered above the 20-day MA.
The long-term momentum is bearish for BTC unless bulls win back the $19,000 level.
Bitcoin (BTC/USD) saw increased buyer interest on Thursday, rising to over $17,100. The price increase reflected renewed optimism in all markets after a soft statement by the US Fed.
A Wednesday statement by Fed Chair Jerome Powell showed that the central bank might slow rate hikes. According to Powell, smaller rate increases could be pursued starting in December. The suggestion raised hopes of slower economic tightening, which has been hitting markets. However, Powell still warned that monetary policy could remain restrictive until real progress to contain inflation is made.
Powell’s statement may boost prices of cryptocurrencies for some time, led by Bitcoin after the FTX-inspired selloff. Nonetheless, DFD Partners President Bilal Little shared insights from the gains. Little says that any time markets undergo periods of distress, they tend to oversell. As markets regain clarity again, the prices look up again. However, the DFD Chief warned that the rally would be hard to sustain.
According to Little, Bitcoin would likely touch the $12,000 to $13,000 level. He warns of other contagion impacts of the FTX collapse amid liquidity risks grappling crypto firms. As such, Little says many crypto firms may be unable to meet liquidity demands or counter the risk concerns.
BTC is recovering above the 20-day moving average
BTC/USD Chart by TradingView
Technically, BTC bulls are pushing the cryptocurrency above the 20-day moving average ($16,586). The cryptocurrency is breaking above a consolidation zone at $16,000.
The RSI is slightly below the midpoint, indicating that demand is catching up with the supply. Still, BTC sellers have the upper hand.
Should you buy BTC?
Despite the latest gains, BTC remains largely bearish. The price recovery above the 20-day MA may offer optimism that BTC price may rise in the short term. However, bears may try to exert their influence at the 50-day MA. The $19,000 resistance may also counter the upside.
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