Bitcoin ‘gives back gains’ after FED comments ‘add downside risks’ to Crypto Markets

Bitcoin ‘gives back gains’ after Fed comments ‘add downside risks’ to crypto markets
Following the Federal Reserve's aggressive statements, analysts expect more weakening in BTC and altcoins. The price of Bitcoin (BTC) continues to provide contradictory signals, increasing investor anxiety and severely influencing asset values throughout the market.

BTC price is trapped below $36,000, according to data from Cointelegraph Markets Pro and TradingView, and despite a small relief bounce on Jan. 26, statements from the latest FOMC meeting appear to be sinking in as investors digest the idea that interest rate rises are on the horizon.

Here's what analysts and traders are saying about Bitcoin's recent price behavior, as well as the macroeconomic issues influencing the larger crypto market.
BTC/USDT 1-day chart. Source: TradingView

A year of trading in the "range"
Mike McGlone, senior commodity strategist for Bloomberg Intelligence, addressed the long-term range-bound trading that BTC has been in since early 2021, posting the chart below and asking, "What stops Bitcoin, Ethereum range trade?"

According to McGlone, the key to escaping the current range are the “bullish fundamentals” that back the underlying strength of Bitcoin.


The Fed continues to add downside risks
A deeper analysis on the impact of Jan. 26’s Federal Reserve meeting was provided by Bilal Hafeez, CEO and head of research at Macro Hive, who noted that the tone of the meeting “turned out to be more hawkish than expected.”

Hafeez pointed to the decision by the Fed to raise the inflation forecast as a sign that the central bank has realized that “they need to be more hawkish than before,” and he highlighted Powell’s comments that “this cycle would be different to the last cycle, which suggests faster hikes than before.”

With that being said, Hafeez indicated that the Fed “has not decided on a path yet,” and noted that Powell “didn’t give much additional information on quantitative tightening except that it would operate in the background.”

Short-term weakness, long-term strength
The near-term outlook for BTC was briefly touched upon by derivatives traders and pseudonymous Twitter user Crypto McKenna, who posted the following chart and stated that “BTC price action is about to get very boring.”

Despite this forecast for near-term weakness and sideways market movement, the long-term view remains positive for a variety of reasons, as crypto expert Will Clemente points out in the following Tweet.

The total cryptocurrency market capitalization is currently $1.663 trillion, with Bitcoin commanding 41.5 percent of the market.