Bitcoin bulls defend $42,000 as San Francisco Fed President backs cautious rate hikes

Traders are waiting after Bitcoin (BTC) broke again below the $43,000 resistance and awaiting an impulse that could support the bullish momentum back into the $50,000 area.

Data from TradingView shows that bitcoin price has been trading in a range of $41,500-$43,000 for the past few days and amid escalating tensions between Ukraine and Russia and a rate hike by the Fed, many traders are not optimistic about the future outlook.

BTC 1-hour price chart | Source: TradingView

The San Francisco Fed chairman said being too aggressive in raising interest rates could be destabilizing. She emphasized:

“I’m looking at the data and it’s clear we need to pull some support from the economy. However, history also shows that abrupt and aggressive Fed policy can have a destabilizing effect on the growth and price stability we seek.

After Fed President St. Louis James Bullard called for a rate hike of at least 1% by the end of June, this comment changes expectations for the Fed’s first rate hike, which is likely to be 0.5 percentage points in March and up to 1.75% by the end of the year CME Group’s FedWatch tool. When Fed officials released their guidance in late December, the average target rate through the end of 2022 was about half that.

Daly isn’t ready for drastic action, even if inflation far exceeds the Fed’s 2% annual target.

In her view, the Fed should hike rates at its March 15-16 meeting, then “watch, estimate and be very cautious about forecasting and then raise rates further when the time comes. It could be the next meeting or the one after that.”

Is Bitcoin on the way back to zero?

Peter Schiff will be sure to join the latest Bitcoin debates by posting the chart below, which indicates a double spike in BTC as a sign that the digital asset is on track to drop to $0.

Schiff asked followers to “imagine how bad this chart will be if Bitcoin breaks below the $30,000 region,” while making a pathetic prediction that “when this double top is complete, then the true reserve price will be 0.” “.

“A drop to $10,000 is likely, but there is no reason to think this area will be a permanent bottom.”

1 week BTC price chart | Source: TradingView

A more in-depth article analyzing the current chart formation, provided by analyst and Twitter user TechDev, has broken “BTC’s range of movement over the past year” into sub-ranges that are two weeks long.

“Yesterday’s 2W close above the $40,000 region shows that the previous close was a divergence. Right now, the 2-week level is playing a pretty important role in determining which sub-range BTC will swing into over the next few weeks.”

BTC price 2 week chart | Source: TradingView

Bullish Crossroads

Signals that Bitcoin price may soon move higher have been spotted by market analyst Caleb Franzen via BTC’s daily candlestick chart since October 2020.

“The red and white indicators use linear regression analysis to measure the slope of the regression on different time frames (slow vs. A bullish/bearish trend crossover depends on the trend. A bullish crossover is occurring.”

BTC 1-Day Price Chart | Source: TradingView

Is the Drop Below $40,000 a Bear Trap?

The recent drop in BTC price below the $40,000 support level was mentioned by a trader and Twitter user nicknamed Phoenix, who posted the chart below depicting this drop as misleading, aiming to “attract traders” and “ Catch breakout traders” which “locks” them on a higher/lower target.”

“History doesn’t repeat itself 100%, but it’s often pretty much the same. Chances are, this is just another wave of deviations. At least sentiment has leveled off near the lows, that’s for sure.”

BTC 1-Day Price Chart | Source: TradingView

The total crypto market cap is currently $1.892 trillion and Bitcoin’s dominance is 42.5%.

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