Bitcoin Price Key Highlights
- Bitcoin price seems to be forming a new short-term rising channel visible on the 1-hour chart.
- Price was weighed down by dollar strength after the FOMC sounded more hawkish than expected in its latest statement.
- Bitcoin price still looks intent to carry on with its climb as technical indicators hint that a bounce is due.
Bitcoin price has given way to dollar strength after the FOMC statement but could be ready to resume its climb.
Technical Indicators Signals
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In addition, the 100 SMA lines up with the rising channel support, adding to its strength as a floor. The 200 SMA is close by so this might be the line in the sand for the current short-term uptrend.
A bounce off the SMAs and channel support could lead to a climb up to the resistance at the $790 area or higher. Stochastic is heading south but is already dipping into the oversold region to indicate that sellers are getting tired. A return in buying pressure could allow a quick bounce or a stronger rally to take place. RSI is still on middle ground and moving sideways so there are no strong directional clues from here.
Market Events
The Fed decided to hike interest rates by 0.25% as expected but what really draw dollar bulls out was their updated dot plot forecasts of rate changes, which featured three more tightening moves for next year compared to their earlier estimate of two hikes. To top it off, policymakers also upgraded forecasts for growth and employment next year.
Fed Chairperson Yellen did mention that they don’t want to speculate on how the Trump administration’s fiscal policy changes might affect their monetary policy outlook. She assessed that the economy could keep growing at a moderate pace moving forward and that further improvements in the labor market are expected.
With that, bitcoin price could give way to dollar demand from here, especially since equities have also been on the rise along with bond yields. Reports that China is easing up on their yuan devalution efforts and restrictions of offshore investments has also been dampening bitcoin gains for the time being.
Charts from SimpleFX