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Risk Rebound

The rebound in risk appetite today is feeding into a strong rally in Bitcoin. The leading digital asset has been firmly higher as stocks and risk assets rally in the wake of news of an emergency funding deal for struggling First Republic Bank in the US. The announcement yesterday saw risk assets soaring higher, helping drive bullish sentiment in Bitcoin. BTC is now up more than 30% off last week’s lows and while above the $25k mark.
 

Shifting Fed View

Alongside the broader pickup in risk sentiment, the big driver behind the rally in Bitcoin has been the scaling back of traders’ Fed rate hike expectations in the wake of recent market turmoil. With banking sector liquidity concerns rife, the market is now expecting a far less hawkish decision and outlook from the Fed next week with projections now split between a smaller .25% hike and an unchanged decision.
 

Upside BTC Risks

Looking ahead, BTC looks poised to gain further into the March FOMC next week. With the Fed likely to strike a less hawkish tone, BTC has plenty of room to build to the upside as more capital moves back into the market as traders look to diversify their exposure in the wake of recent banking sector issues.
 

Technical Views

BTC

The rally off the 20575 level looks to have completed the right shoulder of the large inverse head and shoulders pattern which has framed the basing action over the last year or so. With $25k roughly the neckline, while above here the focus is on a test of the 28110 level next.

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