Bitcoin Smashes Back Through $80,000 as Dovish Fed Signal Crushes Rate Hike Bets
The Bitcoin price surged to $80,477 in just hours after a dovish signal from the Federal Reserve crushed rate hike bets. This sudden increase marked a significant gain of approximately $2,400 or 3.07% against its previous close at $77,302.
The catalyst behind this move was Federal Reserve Governor Christopher Waller's statement that he is inclined to support leaving interest rates unchanged at the September 15-16 meeting, provided August inflation data confirms that price pressures are cooling down.
This announcement led to a collapse in implied odds of a September rate hike, from around 66% to approximately 54.6%, as per CME FedWatch. The reaction across various assets was immediate and consistent, with the two-year Treasury yield dropping by seven basis points to 4.30%, the dollar falling by up to 0.5%, and gold adding 2.3%.
The chart analysis suggests that Bitcoin has broken out of its tight range, with the 200 EMA sitting at $73,638 still sloping upward. However, the RSI(14) has spiked to 72.13 from the mid-40s, indicating a potentially overbought market.
The levels to watch next for Bitcoin include $80,477 as an immediate hurdle, followed by $81,300-$81,800 as a late August supply shelf, and then $82,000 as a key resistance level. On the downside, supports at $78,670, $76,000-$77,000, and $74,450 are crucial to maintain the momentum.