Bitcoin (BTC) held $40,000 on March 17 after an anticipated key interest rate hike from the Federal Reserve delivered a strong response.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Fed singles out Ukraine war in inflation comments
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD climbing to local highs of $41,500 after the Fed announced it would raise rates by 25 basis points to 0.5% — the first such move since 2018.
The Federal Open Market Committe (FOMC) voted almost unanimously for the raise, with an accompanying statement warning of persisting “upward pressure on inflation” thanks specifically to the war in Ukraine.
“The invasion of Ukraine by Russia is causing tremendous human and economic hardship,” it read.
“The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.”
Going forward, there would be further hikes, the FOMC continued, and the Fed would begin reducing its asset holdings in a bid to decrease its record high balance sheet.
“The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments,” the statement added about possible future changes to policy.
After its initial bullish reaction, Bitcoin consolidated higher overnight, still circling $41,000 at the time of writing.
For Cointelegraph contributor Michaël van de Poppe, the area just below $40,000 was now essential to flip to support.
“The good reaction of the markets here, in which it broke through $39.6K,” he told Twitter followers on the day.
“Next will be the question of whether we can sweep the $42K high. That would open the gates towards the $46K barrier. Crucial to hold; $39.6K area for Bitcoin.”
Those levels were already well established as rungs on the ladder spanning Bitcoin’s 2022 trading range between $33,000 and $46,000, with an analyst this week arguing that only a move outside the top or…