Bitcoin hits $39K as Fed rate hikes are questioned

Bitcoin (BTC) reached a price of $39,000 on December 1, the highest since mid-2022, following remarks by US Federal Reserve Chair Jerome Powell that raised hopes of a shift in policy. The cryptocurrency surged as Powell discussed the Fed's commitment to reducing inflation and keeping policy restrictive. While some analysts took a cautious view of the Fed's future actions, Bitcoin traders took advantage of the positive sentiment. The next meeting of the Federal Open Market Committee in mid-December will provide further insight into potential interest rate changes.

Powell's remarks spark Bitcoin rally

Bitcoin bulls were already in a strong position when Powell spoke at Spelman College, Atlanta. Powell emphasized the Fed's dedication to lowering inflation and maintaining a restrictive policy until inflation is on track to reach the target of 2%. Despite the cautious tone, Powell's comments were seen as boosting risk asset sentiment and contributed to Bitcoin's price increase.

Market expectations favor interest rate pause

The Federal Open Market Committee's next meeting in mid-December will announce any changes to interest rates. Market expectations, as indicated by CME Group's FedWatch Tool, currently lean towards a pause in rate hikes. Bitcoin traders have taken notice of this sentiment and are positioning themselves accordingly.

Bitcoin targets extend beyond $39K

Bitcoin's rally to $39,000 was met with a significant level of sell-side liquidity, according to popular trader Daan Crypto Trades. This liquidity, combined with resistance levels at $39,000 and $39,200, suggests that Bitcoin may face some obstacles in its upward trajectory. However, traders remain optimistic, with some predicting that Bitcoin could reach $39,200 in the near future.

It is important to note that this article does not provide investment advice or recommendations. Readers are encouraged to conduct their own research and exercise caution when making investment decisions.