• The Federal Reserve of the United States (Fed) has raised the funds rate once more this week – this time, by 25bp.
• The decision triggered a selloff in the US dollar, which lost ground against its peer fiat currencies and Bitcoin.
• Technical analysis favors a stronger dollar, but investors must be patient before shorting the market as BTC/USD is in a rising wedge formation.
Federal Reserve Raises Funds Rate
The Federal Reserve of the United States (Fed) has raised the funds rate once more this week – this time, by 25bp. This decision triggered a selloff in the US dollar, which lost ground against its peer fiat currencies and Bitcoin.
US Dollar Weakness
The reason for the greenback’s weakness was the message that disinflation in the United States had already begun. As such, it appears that the Fed is approaching the terminal rate for this tightening cycle. Nevertheless, investors suddenly decided it was time to buy back into dollars on day following the Fed’s decision.
BTC/USD Price Action
Bitcoin dropped against the dollar after trading above $24k for a brief period. At current levels, it sits dangerously at lower edge of a reversal pattern – a rising wedge formation. A bearish divergence also forms when oscillator such as RSI fails to make new higher highs while price action does form them; hence showing signs of weakness in market.
Trading Strategy
Traders must be patient before shorting BTC/USD as there is still potential for an upward move within reversal pattern if market breaks below pivotal area marked on chart above; thus ending pattern and allowing for new market move to start afterwards.
Conclusion
The Fed’s decision triggered some volatility in USD and Bitcoin markets but technical analysis still favors a stronger dollar going forward due to inflation concerns being over with now. Nevertheless, investors should keep an eye on BTC/USD charts and wait patiently until they are sure that reversal pattern has ended before jumping into any trades related to this currency pair