The Federal Reserve continues to "stand still", and Bitcoin regains $35,000

On Wednesday afternoon Eastern Time, the Federal Open Market Committee (FOMC) of the Federal Reserve announced that it would maintain the benchmark federal funds rate range at 5.25%-5.50%, in line with market expectations.

Market data shows that Bitcoin returned to $35,000 after the U.S. stock market closed on Wednesday, hitting a nearly 17-month high, with a 24-hour increase of more than 2% as of press time. Solana 's SOL led the sharp rise in altcoins, with SOL soaring 16% in the past 24 hours to a 14-month high. Native tokens of Layer 1 blockchains such as Avalanche (AVAX), Polkadot (DOT) and Near Protocol (NEAR) rose 6% to 10%. The global cryptocurrency market value is $1.32 trillion, up 2.3% in the past 24 hours.

Powell says Fed not considering rate cuts at all

While interest rates remained unchanged for now, the U.S. central bank left the door open for future rate hikes.

Fed Chairman Powell said in a post- FOMC press conference that rising Treasury yields have led to a tightening of financial conditions and further rate hikes will be made if necessary. Powell said the committee is "moving cautiously" and will continue to make decisions "meeting by meeting."

“The fact is that the committee is not thinking about cutting rates at all right now,” Powell said. “ We are not talking about cutting rates. We remain very focused on the first question, which is, ‘Has the stance of monetary policy been sufficiently restrictive to reduce inflation sustainably to 2% over time?’ That’s what we’re focused on.”

“The Fed is likely to act after holding rates unchanged for two straight weeks and keeping them at a 22-year high,” Edward Moya, market analyst at OANDA, said in a newsletter. “A rate hike in the coming months cannot be ruled out, but swaps suggest traders are not convinced.”

Market participants currently see a 74% chance the Fed will keep interest rates at current levels in January, up from 59%, and could begin cutting rates around mid-2024, according to data from CME Group’s FedWatch tool.

Stocks closed sharply higher for the day, with the S&P 500 up 1.1% and the tech-heavy Nasdaq 100 up 1.5%. The 10-year Treasury yield fell to 4.73% from nearly 5% earlier in the week, reflecting a lower chance of further rate hikes.

Bitcoin continues to rise

Justin d'Anethan, head of business development at cryptocurrency market maker Keyrock , said in an analysis: "Bitcoin is a hedge against loose monetary policy, so lower yields will enhance this value proposition and investors' willingness to buy and hold cryptocurrencies. If hints of changes in interest rate policy become more apparent, people expect the cryptocurrency market to rise."

Justin d'Anethan, head of business development at Keyrock, said in an interview with Bloomberg that today's monetary policy tone is likely to be welcomed by all investors.

“This will drive traders to invest in risk assets, both in traditional and decentralized finance,” D’Anethan said, adding that traders can now expect greater liquidity in the market. “This will allow for more complex positions, which in turn could create more dynamic trends rather than the range-bound movements we have seen for much of the year.”

D’Anethan highlighted the spot Bitcoin ETF narrative as another factor that makes speculators more willing to bet on the future, saying, “The possibility of large allocators allowing new capital to enter the market could support the price of Bitcoin.”

Technical indicators suggest bulls have advantage

Jim Wyckoff, senior technical analyst at Kitco, noted, "November bitcoin futures prices weakened slightly in early U.S. trading on Wednesday. Recent price action has formed a bullish pennant pattern on the daily chart. However, prices need to see a bullish upside breakout this week or the bullish pennant will be negated, and with an upward price trend on the daily chart, Bitcoin bulls still have a solid near-term technical advantage ."

Gunter Lackmann, an analyst at MN Trading, said in his daily analysis that Bitcoin’s daily chart shows that its price is “in a bullish consolidation, similar to an ascending triangle chart pattern, as the 8EMA (8-day exponential moving average) is rising. Currently, the invalidation of this pattern would be a daily candle close below $34,000, but we should also be prepared for an intraday retest of the 8EMA, which was last tested on October 23, and overhead resistance is around $34,800.”

He said that “most conservative traders will wait until the rally (which usually comes in two or three legs) is complete” to re-enter the market. My potential upside targets are $36,000-38,000 and $40,000-42,000. When the market gets excited about more upside, a retest of the previous HTF range high around $31,500 will be more likely.”

Market analyst Rekt Captial reminded investors that for traders waiting for a sharp correction in Bitcoin to build positions, there are only 100 days left for such an opportunity to appear. Rekt Captial posted on the X platform: "Historical data shows that Bitcoin may only have 100 days left to complete a further retracement, which will provide one of the last dip buying opportunities before the halving."