BTC Price Forecast: How a Hawkish Federal Reserve Could Affect Bitcoin’s Current Upswing

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Bitcoin (BTC), the pioneer of cryptocurrencies, is gaining value. Currently trading at $28,800, the digital asset has seen an upswing of 7.2% in the last day alone. This surge of growth comes from a recovery phase that originated from the $24,750 price point.

Rate Hike Speculations and BTC’s Rally

Matthew Dixon, Evai’s founder, recently shared on Twitter his view of the Federal Reserve’s influence on Bitcoin’s performance. He highlighted that rate futures indicate a 78% chance of a Fed rate increase in July, but no additional hikes this year. 

This view contrasts with the US Federal Reserve’s own, suggesting a necessary rise of 50 basis points by year’s end due to slower-than-expected inflation moderation. 

Dixon notes that a more hawkish testimony from the Federal Reserve tonight could put a pause to Bitcoin’s current rally. Furthermore, Fed Chair Jerome Powell is set to testify before Congress, an event that could potentially affect market sentiments.

Bitcoin’s Resilient Recovery

Significantly, Bitcoin smashed through the $26,500 barrier and even the $27,000 resistance, showing robust momentum in its upward trajectory. A look at the four-hour chart reveals that Bitcoin has overcome not only the $26,500 hurdle but also a significant bearish trend line that had resistance at $25,900. 

This victory signaled the breaking of the $28k mark for the first time in three weeks, marking Tuesday evening with a high of $28,150. This uptick has been pivotal in the revival of the cryptocurrency after it had recently dropped below $25k.

On the flip side, there are concerns over a possible decline if Bitcoin cannot sustain this momentum. There’s the potential risk of a fall below the $27,500 support level, with the $27,200 level standing as the next critical support area. A downward break, culminating in a close below $27,200, might send Bitcoin spiraling back to the $26,000 zone in the upcoming days.