Bitcoin price is at the time of this writing slightly above $27K per BTC, after losing $28K almost immediately following the Federal Reserves rate hike decision.
The rate increase was less than originally anticipated, but cryptocurrencies and the stock market have tumbled following the decision.
Federal Reserve Proceeds With 25 Bps Rate Hike, Volatility Ensues
The United States Federal Reserve moved forward today with a 25 bps rate increase even amidst a growing crisis in the banking sector – a situation that thus far Bitcoin has responded well to.
Prior to the situation unfolding, the consensus was that the Fed would increase rates to 50 bps instead. Despite coming in less than the worst-case scenario, the market could have been pricing in no increase at all, causing BTC to correct.
As a result, the stock market and cryptocurrencies, including the recently resilient Bitcoin, took a hard dive. In the 1H BTCUSD candlestick beginning at 2PM ET, the top cryptocurrency by market cap plunged by more than $1,300 and 4.8%.
The one-hour candle closed as a marubozu, which is a powerful bearish pattern that could suggest the downside could continue through tomorrow.
Bitcoin Retests $27K: Will Another Higher High Confirm An Uptrend?
The selloff took BTCUSD right to short-term support at $27K, which must hold or Bitcoin will retest lower prices. If lost, areas that could provide support include $24K, $22K, and $20K below it.
The recent low set below $20K is the most important line in the sand for bulls. Holding at these levels would create another higher high and higher low, further suggesting an uptrend is brewing across crypto.
The Fed softening its aggressive rate increases could be a sign that things are worse-off in the banking industry and elsewhere, which ultimately could be a boon for Bitcoin.
Since the situation in the banking sector first erupted, BTCUSD climbed more than 47% and caused the world to pay attention. The outcome of this retest and continued upside would also send an important message that the bear market has ended.
Will support at $27K ultimately hold?
