Jerome Powell announced “disinflation” and sent bitcoin above $24,000

As expected, the US Federal Open Market Committee (FOMC) raised the rate to 4.75%. Bitcoin responded with growth.

What Powell said

As is customary, Fed Chairman Jerome Powell spoke after the Committee meeting. He said: “The FOMC raised our discount rate by 25 basis points today. We continue to believe that it would be appropriate to continue to increase it in order to meet the objectives of monetary policy, which will remain fairly restrictive until inflation returns to 2% over time. In addition, we will continue the process of significantly reducing the size of our balance sheet. The cost of restoring stability is likely to be to maintain a restrictive policy for some time to come.”

But he saved the most important statement for press conferences:

I think now for the first time we can say that the process of disinflation has begun.

This is exactly what the adherents of risky assets wanted to hear.

Eight trading firm founder and CEO Michael van de Poppe commented latest events:

A giant move in the markets, even a bust: the Nasdaq rose 3% and $DXY plummeted. The good news is that a period of disinflation is on the horizon, but people are underestimating a recession.

Reaction and prospects of bitcoin

According to the Cryptocurrency Screener Cryptovizorwhich determines the market price of BTC/USD based on the results of trading on the largest spot exchanges, the asset reached a new 6-month high at $24,282.

1 week bitcoin chart. Source: Cryptovizor

At the moment, Bitcoin is approaching the 50- and 200-week moving averages from below, which usually act as important support in a bull market. According to Cryptovizor CEO Alex Zukutoke, fixing above these lines will confirm the global nature of the cryptocurrency rally.

After studying the 1-month bitcoin chart, a Rekt Capital trader made the following forecast:

Historically, the price moves slowly during the month before the breakout of the global BTC downtrend. If history repeats itself, February will be boring. <...> But March could be the month of the breakout of the global downtrend.

1 month bitcoin chart. Analytics: Rekt Capital

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