Bitcoin resumes upward movement amid Fed meeting results

Bitcoin was at a crossroads, and many technical metrics pointed to a high probability of a local correction. The cryptocurrency remained overbought, and trading volumes began to fall. At the same time, sellers began to seize the initiative, which threatened to reduce BTC quotes.

The Fed meeting, being significant for both the global economy and the crypto market, was a decisive factor for investors. As a result, Bitcoin resumed its upward movement, and the target of $25k–$28 at this stage does not look unattainable.

The Federal Reserve confirmed market expectations and raised the key rate by 0.25%, thus giving reason to believe that the easing policy is about to end. After the February meeting, the key rate reached 4.75%.

On the CME, the probability of a 0.25% rate hike in March 2023 is estimated at 82%. Also, leading investment analysts believe that despite officials' statements, the Fed will begin lowering rates as early as 2023.

Federal Reserve Chairman Jerome Powell said that despite the success in the fight against inflation, a rate hike is appropriate. This means that the rate will reach at least 5%. At the same time, the official acknowledged that a deflationary movement had begun.

Powell said he still supports the decision not to cut the rate in 2023. However, the official noted that following the results of March, the Fed will review the policy of raising the key rate. The head of the regulator also noted that there will be several more increases in the indicator before the pause begins.

There is no denying that Powell's words are sounding more positive, despite the official's reserved manner of communication. In the medium term, the markets should expect inflation rate to continue to decline and a slowdown in the quantitative easing policy.

This means investment flows, including into cryptocurrencies, will increase significantly in 2023. Another important signal for this was the updated forecast of the World Bank, which expects the global economy to grow by 2.9% in 2023.

In addition to the positive results of the Fed meeting, it became known that CME whales have almost completely reduced their short positions. The last time this was observed before the start of the bullish rally in August 2020.

Bitcoin also managed to "resurrect" the bullish idea thanks to a significant activation of buyers. As a result of yesterday's trading day, the cryptocurrency managed to completely absorb the bearish volumes from January 30.

Subsequently, BTC continued its upward movement and, as of February 2, reached the $24.2k resistance zone. The cryptocurrency also broke through the $22.9k–$23.4k consolidation range. As of writing, Bitcoin is trading above $23.8k.

Technical metrics are moving sideways, indicating a decrease in buying intensity. However, this is a temporary consolidation that will lead to a retest of the $24k–$24.2k zone. Bitcoin proved that there will be no corrective movement in the near future.

The positive results of the Fed meeting suggest that Bitcoin is preparing to update the local high. Buying and on-chain activity continues to rise, thus, we should expect an update of the local high around $24k–$25k in the near future.