The FED's influence on Bitcoin price appears to be back in action following its latest policy update.
Despite the institution's decision to pause interest rate hikes, the price of Bitcoin remained largely unchanged this week. BTC price has been trading in the range between $25,000 and $30,000 for a long time.
Unlike the rallies that followed oversold conditions in March and June, Bitcoin has been trading sideways since its last major decline. Rob Ginsberg, an analyst at Wolfe Research, noted that the movement in interest rates affects long-term, speculative assets, including Bitcoin.
Bitcoin struggled to recover after its decline on August 17. Ginsberg suggested that if interest rates rise to the top of the new cycle, it would not be surprising if Bitcoin falls below the $25,000 support level.
Last year's cryptocurrency winter was unique in that the Fed and its campaign to raise interest rates to fight inflation had perhaps the biggest impact on Bitcoin's price movements. Although it increased by approximately 60% in 2023, regulations and expected developments in the Bitcoin exchange-traded fund field could not push the prices even higher.
According to Ginsberg, if Bitcoin rises above $28,000, it could rise to $32,000 in the short term. However, Ginsberg believes this is unlikely given the market's recent deterioration.
The analyst said that if Bitcoin breaks below the $25,000 support level, it could potentially drop to between $20,000 and $21,000. Ginsberg noted that real rates are rising and reaching high levels, which he sees as the biggest hurdle for speculation and crypto in particular.
*This is not investment advice.
