Bitcoin Surges as Powell Speaks

The price of BTC experienced a modest decline, settling at $29,807, which marked a minor deviation from its peak value of $29,500 on October 20. It was a whirlwind 24-hour period that played a pivotal role in shaping the trajectory of BTC's valuation. Simultaneously, the value of XRP's witnessed a dip, resting at $0.52, but swiftly rebounded above the $0.50 threshold in response to a momentous legal triumph for Ripple.

BTC/USD 1-hour chart. Source: TradingView 

Impact of a Hawkish Fed Chair Powell on BTC Price

As per TradingView's meticulous data analysis, the BTC/USD pair inched closer to its highest point in two months, kicking off the week on an optimistic note. The cryptocurrency market seemed to react to the series of events that were set in motion by a speech delivered by Jerome Powell, who serves as the Chair of the United States Federal Reserve, the day prior.

In the midst of the tumultuous U.S. bond market, Powell found himself under tremendous scrutiny and the weighty task of selecting his words judiciously. Initial expectations leaned towards a "very dovish" tone in his speech, but the actual address, briefly interrupted by protesters, revealed Powell to be exceptionally cautious in his economic outlook.

Powell remarked, "The current policy stance is constraining, as tight policy measures are putting downward pressure on economic activity and inflation due to interest rate hikes. Given the swift pace of these tightening measures, there may be additional constraints in the future."

He acknowledged that the Fed recognized the potential pitfalls of raising rates excessively. Powell explained, "Taking too little action could lead to entrenched inflation above the target and necessitate more aggressive monetary measures at the expense of employment. Taking excessive action could also harm the economy unnecessarily."

"In light of the uncertainties and risks, considering how far we've come, the Committee is proceeding with caution."

CME Group's FedWatch Tool data indicated a shift in market expectations regarding future rate decisions. The Federal Open Market Committee (FOMC) is now widely expected to keep rates unchanged at their current levels during their upcoming meeting on November 1. This is a stark contrast to the 88% probability prior to Powell's speech.

Fed target rate probabilities chart. Source: CME Group 

Following the speech, news emerged that U.S. regulatory authorities had dropped criminal charges against executives of the blockchain company Ripple. In response, XRP's price shot up over 6% within 24 hours.

XRP/USD 1-hour chart. Source: TradingView 

Trader Signals a Bitcoin "Impulse" Phase

With growing anticipation surrounding the approval of a U.S. Bitcoin spot price exchange-traded fund (ETF), Bitcoin gained momentum overnight. At the time of writing, Bitcoin's daily highs reached $29,689, coming within $200 of the recent peak seen in the volatile swing on October 17.

A prominent trader, Jelle, expressed optimism, saying, "Bitcoin appears to be steadily filling the gap. Let's aim for that $30,000 milestone." He had previously suggested that Bitcoin seemed "eager to fill" the gap left on October 17.

$BTC has launched.

Keeping it as simple as it can get:

The same way 26.8k was the origin of our last impulse, 28.6k is now the origin of the current one. Above that, we are going A LOT higher, FAST.

Drop below 28.6k and the local uptrend will be violated and we may get a bit… https://t.co/odakQpZbTL pic.twitter.com/CbhLBo133G

— CrediBULL Crypto (@CredibleCrypto) October 20, 2023

Another trader, CrypNuevo, warned of significant liquidations, emphasizing that long positions outnumbered shorts by a four-to-one margin. He suggested that Bitcoin might experience a retracement during the U.S. trading session, making it an intriguing day for trading.

$BTC

Liquidation levels and liquidation heatmaps.

Quick thoughts:
- All our liquidation levels to the upside from yesterday have been hit.
- Delta long liquidations at $15B (mid-high amount and enough to consider a retrace is coming soon).
- Current long-short open positions… pic.twitter.com/dAqbRbaimc

— CrypNuevo ???? (@CrypNuevo) October 20, 2023

Read more about: Bitcoin's $30,000 Surge: Insights and Predictions