Bitcoin relief rally fails to close above $40,000

With the Biggest rate hike in twenty years happening today, with the Fed announcing a 0.5% rate hike, the broader markets were relieved that Powell did not initiate a .75% hike, and he pretty much alleviated the possibility of a .75% rate hike in the future. This was perceived as less hawkish and sent the equities markets into a rally. At the time of writing, the S&P 500 is trading up by nearly 3%, and the Nasdaq Composite surpassed 3% gains on the day. These single-day gains in U.S. equities are some of the largest witnessed in some time.

Naturally, with the correlation between the Nasdaq and Bitcoin being as high as it is, one would expect the rise in the Nasdaq Composite would bring about a rise in Bitcoin. However, Bitcoin’s rally began many hours before the rise in equities or the Fed’s announcement. By the time of the Fed announcement, Bitcoin had already rallied from just below $38,000 to above $39,000. The hour of the announcement brought Bitcoin above $40,000 but only briefly. However, the gains after the Fed’s announcement occurred with a much higher trading volume than last night and early morning’s moves.

Today’s gain in Bitcoin of over 5% failed to break out of the broader trading range of $40,000 - $37,500, so today’s move, while welcomed by the bulls, was not successful in signaling that the bear market has ended.