Bitcoin (CRYPTO: BTC) was popping up over 3% on Wednesday after closing Tuesday’s 24-hour trading session up 3.26%, but the crypto started to pull back after the Federal Reserve issued a 0.5% interest rate hike at 2 p.m.
The decision was in line with economist estimates and implied a slight shift in the Fed’s policy, but the central bank’s tone remained hawkish, raising its inflation projection for 2023.
The news caused Bitcoin to drop under the $18,000 mark, where the crypto was battling the 50-day simple moving average (SMA), which is trending near $17,800.
Tuesday’s bullish price action caused Bitcoin to break up from a sideways trading pattern, which had been holding the crypto down since Dec. 1 but for an uptrend to be confirmed, Bitcoin will eventually need to form a higher low above $16,875.
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The Bitcoin Chart: If Bitcoin closes the trading day with a significant upper wick, the crypto will print a shooting star candlestick, which could indicate the temporary top is in, and the crypto will trade lower during Thursday’s session. If the crypto bounces to close the trading session near its high-of-day price, a bullish Marubozu candlestick will form, which could indicate higher prices are on the horizon.
- Bitcoin was trading on higher-than-average volume, which indicates an increased level of interest from traders and investors. As of Wednesday afternoon, Bitcoin’s volume was measuring in at about 36,000 on Coinbase, compared to the 10-day average of about 22,770.
- Bullish traders want to see big bullish volume come in and push Bitcoin securely above the 50-day SMA, which will put it in range of regaining the $18,000 level as support. Bearish traders want to see big bearish volume break Bitcoin back down under $17,580, which will drop the crypto back into the sideways channel.
- Bitcoin has resistance above at $19,915 and $20,545 and support below at $17,580 and $16,000.