Bitcoin Hits $39K Milestone Amidst Federal Reserve Speculations and Market Optimism
Bitcoin surged to $39,000 on December 1, marking its highest level since May 2022, fueled by the optimistic response to the latest Federal Reserve inflation commentary. The rally gained momentum as Federal Reserve Chair Jerome Powell spoke at Spelman College in Atlanta, Georgia, signaling potential policy easing.
During his appearance, Powell emphasized the Federal Open Market Committee’s (FOMC) commitment to gradually reducing inflation to 2%. However, he cautioned against prematurely ending the rate hikes, stating, “It would be premature to conclude with confidence that we have achieved a sufficiently restrictive stance, or to speculate on when policy might ease.”
Despite Powell’s cautious tone, his comments on the current state of the U.S. economy and efforts to curb inflation resonated positively with risk asset sentiment, triggering a surge in Bitcoin prices. The Kobeissi Letter, a financial commentary resource, maintained a reserved outlook, stating that the Fed is unlikely to change its narrative, preferring a cautious approach to prevent inflation resurgence.
The upcoming FOMC meeting in mid-December will provide insights into potential changes in interest rates. Market expectations, as per CME Group’s FedWatch Tool on December 1, indicated a consensus favoring a pause in rate hikes.
Bitcoin capitalized on the positive mood, standing in contrast to a subdued reaction to earlier U.S. macroeconomic data. Notably, popular trader Daan Crypto Trades highlighted the significance of the sell-side liquidity involved in the brief surge to $39,000.
Keith Alan, co-founder of trading resource Material Indicators, shared insights into the BTC/USDT order book liquidity, identifying $39,000 and $39,200 as significant resistance levels. The nearest substantial buyer support was noted at $38,000. Predictions from traders like BitQuant and Crypto Ed suggested a potential daily close above $38,000, signaling a robust market sentiment.
Daan Crypto Trades observed Bitcoin breaking out of its previous trading range, while Crypto Ed forecasted further upside, projecting Bitcoin’s trajectory to reach at least $39,200. As Bitcoin continues to captivate market attention, investors eagerly await the outcome of the FOMC meeting for potential clues about the future direction of interest rates and its impact on the cryptocurrency market.
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