Bitcoin price action returns to tackle familiar resistance, with bulls failing to make fresh inroads toward $25,000.
Market Update
Bitcoin (BTC) rebounded to key resistance on Feb. 8 as crypto markets got a boost from a familiar source.
Powell: “Disinflationary process” is here
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching the important $23,400 zone on Bitstamp overnight.
The pair reacted positively to the latest comments from the United States Federal Reserve, which also sent equities higher during the Feb. 7 Wall Street trading session.
Fed Chair Jerome Powell again mentioned “disinflation” during his appearance, reinforcing market hopes that interest rate hikes could cool more quickly in line with inflation. These stemmed from the latest meeting of the Federal Open Market Committee (FOMC) on Feb. 1, where the Fed raised rates by 0.25%.
“The message that we were sending at the FOMC meeting last Wednesday was really that the disinflationary process — the process of getting inflation down — has begun, and it’s begun in the goods sector, which is about a quarter of our economy,” he said at The Economic Club of Washington, D.C.
Powell nonetheless cautioned that there was “a long way to go” and that the U.S. was in “the very early stages of disinflation.”
Despite this, risk assets rallied into the Wall Street close, with the S&P 500 and Nasdaq Composite Index finishing up 1.3% and 1.9%, respectively.
Bitcoin also erased previous weakness, having dropped below $22,700 earlier in the week, but bulls proved unable to tackle ask liquidity at $23,400 and beyond.
That liquidity remained in place on the day, as visible in data covering the Binance order book supplied by on-chain monitoring resource Material Indicators.
“Markets rallied into the close yesterday, with Bitcoin’s last H4 candle showing weakness at resistance & printing a shooting star,” popular trader Mark Cullen summarized about the latest events.
“I personally am still waiting for the lows to get swept. BUT if the BTC can close a H$ above 23.4k I will look for a push higher.”
Crucial area held for #Bitcoin, so we should be seeking for continuation.
Gameplan is simple;
– Crack $23.3K and we’ll see new highs, correction is over.– Lose $22.6K and I’ll be seeking $21.5-21.7K for longs on #Bitcoin. pic.twitter.com/xJp6iSbeQb
— Michaël van de Poppe (@CryptoMichNL) February 8, 2023
Michaël van de Poppe, founder and CEO of trading firm Eight, was also encouraged by Bitcoin’s reaction. A flip of $23,300 to a more solid support, he told Twitter followers on the day, would mean that the latest BTC price correction “is over.”
BTC/USD traded at around $23,200 at the time of writing, with traders still counting down to volatility returning.
Golden cross vs. death cross to resolve in a “few days”
Looking ahead, the rest of the week held little by way of important macroeconomic cues for crypto markets.
Related: Bitcoin takes ‘lion’s share’ as institutional inflows hit 7-month high
As Cointelegraph reported, eyes were already on next week’s inflation data, coming in the form of the Consumer Price Index (CPI) print for January.
At the same time, chart analysts hoped for a positive outcome from Bitcoin’s latest “golden cross” on the daily chart — its first since September 2021. At the same time, however, BTC/USD weekly timeframes continued to print a “death cross,” a phenomenon which often preceded further downside in the past.
“Many say Death Cross/Golden Cross Lagging Indicator. It is Lagging for those who only think Golden Cross means Bullish, and Death Cross means Bearish. I use this indicator to understand Momentum,” fellow trader Jibon wrote in part of a dedicated Twitter thread on the topic on Feb. 7.
Jibon compared the current setup to previous instances in 2015 and 2019 and added that it would take a “few days” for the impact of the crosses to become more obvious.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
