Bitcoin (BTC) Price Pauses Below $30K, Here is Where it Could Be Headed Next
The Bitcoin (BTC) price is largely unchanged in the mid-$29,000s on Friday.
The cryptocurrency found decent support earlier in the session when it briefly fell to test the $29,000 level and 21-Day Moving Average just above it.
But the Bitcoin bulls seem to be taking a breather ahead of the psychologically important $30,000 level, as key macro events including a rate decision from the US Federal Reserve next week loom.
US economic data released on Friday in the form of broadly as-expected, but still fairly hot Core PCE inflation and Q1 Employment Cost Index numbers were viewed by the market as supporting the case for an already widely expected 25 bps rate hike from the Fed next week.
That would take US interest rates to 5.0-5.25% and markets are even moving to price in a near-30% chance of another interest rate hike from the Fed at its next meeting in June.
But as bank crisis concerns remain front and center as First Republic is taken into FDIC receivership, most analysts are expecting a pause to the rate hiking cycle in subsequent meetings.
The Fed’s interest rate hiking cycle has put the banking sector under enormous pressure by 1) hitting the value of bank bond portfolios and 2) encouraging withdrawals to higher-yielding money market funds.
So long as a Fed pause remains the base case assumption, macro shouldn’t be too much of a headwind for Bitcoin and the broader cryptocurrency market.
And if next week’s US jobs and ISM PMI survey data come in week and boost US recession bets, that could bolster Fed rate cut bets (even if the Fed continues to push back against the idea of a near-term rate cutting cycle at next week’s meeting).
That could be a tailwind for Bitcoin and help it push back to the north of $30,000, assuming the US
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