Following another rate hike from the US Federal Reserve, Bitcoin has climbed back above the $29,000 mark, surpassing its 21 and 50-Day Moving Averages in the process.
On Wednesday, the US central bank increased the federal funds target range by 25 basis points (bps), bringing the range’s total rate hikes in the last ten meetings to 500 bps.
Given 1) recent success in bringing inflation back under control and 2) recent difficulties among regional US banks, partially resulting from tighter financial conditions, many market participants had bet that this would likely be the last hike from the Fed this tightening cycle prior to the rate announcement.
With a nod to the appropriateness, the Fed did nothing to challenge this narrative.
Bitcoin Still in Consolidation Mode
Low liquidations and a number of other factors, including the fact that prices are still firmly inside the previous multi-week $27,000–$31,000 range, indicating that the Fed meeting hasn’t generated too much of a stir in the Bitcoin market.
These alternative indicators include OKX’s BTC long/short ratio, which was last at 1.45, broadly unchanged versus its level Tuesday and within recent ranges.
A ratio score of above 1 means traders on the platform still favor Bitcoin upside, but not by as much as was the case last month when the ratio hit 1.89.
Meanwhile, cryptocurrency exchange OKX’s BTC margin lending ratio jumped from around 30 to around 42 on Wednesday, near its highest level in the last month.
Overall, OKX’s long/short ratio indicates that the Fed meeting hasn’t caused a material change in the market’s perception of Bitcoin, which is consistent with Bitcoin’s relatively flat price action on Wednesday. However, now that the meeting is over, it does appear as though traders are eager to leverage up once more.
Future volatility brought on by liquidation is now more likely.
According to statistics from coinglass referencing OKX and the decentralized cryptocurrency exchange dYdK, funding rates to open a leveraged Bitcoin futures position remain largely balanced, indicating neither bulls nor bears have seized excessive control of the futures market.
Additionally, the 25% delta skew of Bitcoin options expiring in 7, 30, 60, 90 and 180 days were all largely unchanged on Wednesday at close to zero, above 2022’s bear market levels and still at levels consistent with the ongoing 2023 bull market.
That’s according to data presented by The Block.
A 25% delta skew of above zero means investors are paying a premium for bullish call options versus their equivalent bearish call options, and vice versa.
Bitcoin About to Pop – Where Next for the Bitcoin Price?
While Bitcoin remains well within recent ranges, the cryptocurrency could be about to pop higher again towards $31,000.
That because, if the cryptocurrency maintains its current short-term momentum, it could be about to break to the north of a pennant pattern it has formed over the last few weeks.
Of course, upcoming macro risks, like Friday’s official US jobs report, could up-end bullish sentiment.
That’s because if the data is sufficiently strong, it could boost the argument for the Fed to implement further rate hikes, given the current strong labor market is complicating the Fed’s battle to get inflation under wraps.
