Bitcoin Price Floats Stays Above $29,000 As the US Federal Reserve raises interest rates by 25 bps

On Wednesday, the crypto market showed little response as U.S. Federal Reserve chairman Jerome Powell raised interest rates by 25 basis points (bps). The highly anticipated decision to raise the interest rates aligned with expectations that the Bitcoin price might surge.

Crypto Market Unfazed by Fed's Decision and Powell's Mixed

Bitcoin price remained unfazed as it hovered within the same range, fluctuating most of the week and holding above $29,000. However, the Fed's July announcement shows a short decline, but the overall impact on the cryptocurrency market remained calm.

The Fed's fund target rate showed little deviation from the June announcement, rising from 0.25%to 5.50%. The response in the market was, however, unsurprising as the crypto market had already priced in the central bank's decision to raise interest by 0.25%.

Although Chairman Powell's messages were mixed, he also gave investors a glimmer of optimism. He spoke positively about the decline in inflation and the job market's resilience while emphasizing the Federal Reserve's data-dependent and meeting-by-meeting approach.

Powell said:

"Headline inflation coming down so much is a good thing. The unemployment rate being at the same level as lift-off is a real blessing."

According to Powell, achieving the inflation target might necessitate below-trend growth and softening in the labor market. While a rate hike in September seemed probable, it was not guaranteed due to the Federal Reserve's reliance on data to make decisions.

Bitcoin Shows Bullish Signs with Strong Momentum Above Key Levels

As of the time of writing, the price of Bitcoin is trading at $29,405, showing a daily increase of approximately 0.6%. Despite a decrease of 8.9% in the 24-hour trading volume, market activity for the leading cryptocurrency is on an upward trend.

BTC/USD Daily Chart

The Relative Strength Index (RSI-14) was pointing upwards and the price strength at 45, up from Wednesday's 43, indicated that the bullish momentum is gaining traction.

Furthermore, BTC is trading above the 50-day and 200-day moving averages, which signifies that the bulls have established a strong position on the downside. The 50-day SMA acts as an immediate support level preventing any drop on the near term. This is a strong buyer congestion zone that could provide the hind wings required to scale Bitcoin higher.

Despite these positive indicators, investors still harbor uncertainty about Bitcoin's bullish move, as breaking the $32,000 resistance barrier is crucial to confirm a decisive upward breakout. Once this level is surpassed, Bitcoin's sentiment will likely remain bullish in the long term bringing $35,000 and $40,000 into the picture.

Conversely, a daily candlestick close below the 50-day SMA at $29,200 would see the big crypto drop first toward the recent low at $28,850 and later to the $28,400 one embraced by the 100-day SMA (blue line.) A drop further could force the bulls to retreat toward the 200-day SMA at $26,400 and later to the $25,000 psychological level.