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BTC Bounces Post-Fed

Following a sharp correction lower after breaking out to fresh highs last week, BTC futures bounced off lows yesterday and have now recovered around 50% of recent losses. The driver behind the move was the drop we saw in the US Dollar in response to the March FOMC. The Fed stuck to its guns in forecasting 3 rate cuts this year, despite some speculation of a potential hawkish shift. With fresh focus put on expected easing, USD looks likely to move lower near-term, particularly if we see inflation resume its downward trend. Against this backdrop, Bitcoin prices should remain supported as risk assets continue to improve.
 

Halving Event Up Next

With the FOMC out of the way, the big focus for Bitcoin traders now is the upcoming halving event in April.  On the back of the volatility we’ve seen around printing fresh highs, it’s likely that we see come consolidation for now though, ultimately, the outlook remains in favour of price resolving higher through the medium-term.  Prior halving events have seen bullish action kicking in across the 6 months post-halving and with the Fed expected to ease in this horizon and institutional demand to remain strong, BTC should continue higher through the remainder of the year. The caveat to this is any shift in Fed outlook/policy due to any changes in the macro landscape.
 

Technical Views

BTC

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The correction lower saw BTC finding support into the 60695 level, with price subsequently bouncing. However, the move higher remains capped by 69355 (2022 highs) for now and while this area holds, we could potentially see a head and shoulders pattern developing with 60695 marking the neckline of the structure. 

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