Bitcoin breaks above $17,000. Powell’s words are an announcement of an upcoming bull market?

Dov Herman

3 years ago

During Wednesday’s press conference, Fed chairman Jerome Powell said that recent data are encouraging and justify slowing down the rate hikes starting from December. On this information, Bitcoin jumped to the USD 17,000 region, and investors perceived the statement as confirmation of the long-awaited pivot. Although interest rates in the US will be higher than expected in September, after today’s conference there is a light at the end of the tunnel.

Powell finally agreed with the market

Known for his rigorous approach to markets, Jerome Powell announced today that the economy has clearly slowed down, but further tightening must continue, but to a lesser extent. Powell’s words referred to a number of data from the US economy, including the ADP report, which surprised investors negatively. Although the ADP report is only a preview of Friday’s NFP reading, it shows the number of people employed in the private sector (outside agriculture) based on data collected from approximately 400,000 US companies that are ADP clients. He indicated that despite the forecasts of 200,000, in November this year. In 2017, the American economy created only 127,000 new jobs, which is significantly worse than last month’s result (239,000) and the pessimistic forecasts (200,000).

If this data is confirmed by Friday’s NFP report and tomorrow’s ISM data for industry (PMI estimates published last week were quite weak), so BTC bulls will be able to rub their hands slowly against the second half of 2023. However, it should be borne in mind that just like BTC / USD did not drop overnight from the USD 60,000 level , such increases will be spread over time, especially since in the context of Powell’s words, which show that although inflation is falling, it is still too high and requires further increases in interest rates.

Thus, the market estimates that interest rates will peak at 5% in May next year, and then systematic and slow easing will begin, opening the way for risky assets.
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Bitcoin responds to good news

As part of the well-known saying that bad news is good news, the Bitcoin price is gaining more than 3.5% today (at 21:25) and breaks above USD 17,100, thus setting new 2-week highs. The current target of the bulls is therefore to return to the holiday consolidation zone (USD 18,100 – USD 25,060) and break through the above 50-day exponential moving average.
BTC/USD quotes as of November 30, 2022 (9:25 pm) Source: TradingView The chances for this are so high that the market should slowly recover after the FTX crash, which is announced by Brazil, which will start supporting payments in Bitcoin and other cryptocurrencies. This means that despite the confusion and panic that the FTX crash brought to the markets, investors and even entire countries still see the potential of this sector and do not say no to it categorically. The highlight of the day, however, is the evening speech of the FED chief, who seems to confirm the pivot scenario, as well as saving the economy from a strong recession, supporting both short-term and long-term risky assets.
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