Bitcoin Market Sends Mixed Signals as Fed Rate Hike Odds Rise

The Bitcoin market is sending mixed signals about whether it has hit its bottom. The price of BTC has risen above $90, and odds of a rate hike by the Federal Reserve have tripled in a week. However, spot demand remains frozen near $65K, and institutional buying has flatlined.

A narrowing Coinbase discount and a rare weekly RSI bullish divergence argue that a bottom is forming. These signals are typically seen at cycle bottoms, but they do not necessarily confirm a bottom. Spot demand is negative, and institutional buying has stalled.

The Federal Reserve's next move will have a significant impact on the market. A rate hike is still the base case, but the odds of it happening have increased to 33.7% due to the recent oil price spike. The Fed will need to consider how the energy shock affects inflation and whether it justifies a rate hike.

The crypto market is facing a dual chokepoint crisis with the Middle East conflict disrupting shipping through the Strait of Hormuz and the Red Sea. This has pushed crude oil prices above $90, which in turn has raised concerns about inflation and transport costs. The 30-year Treasury yield has also risen above 5%, making it more expensive for companies to borrow money.