Data from Cointelegraph Markets Pro and TradingView showed BTC/USD reaching the important $23,400 region on Bitstamp overnight.
The pair reacted positively to the latest comments from the US Federal Reserve, which also sent stocks higher during the Wall Street trading session on February 7th.
Fed Chair Jerome Powell again mentioned “declining inflation” during his appearance, boosting market hopes that rate hikes could cool off more quickly in line with inflation. These stemmed from the last meeting of the Federal Open Market Committee (FOMC) on February 1, where the Fed raised interest rates by 0.25%.
“The message we sent at the FOMC meeting last Wednesday is that the process of deinflation – the process of deinflation – has begun, and it has begun in the commodities sector, which accounts for about a quarter of our economy,” he said. at the Economic Club of Washington, D.C
However, Powell warned that there was “a long way to go” and that the US was in the “very early stages of hyperinflation”.
Risky assets rallied on Wall Street’s close, however, as the S&P 500 and Nasdaq Composite finished higher, up 1.3% and 1.9%, respectively.
Bitcoin also erased previous weakness, having fallen below $22,700 earlier in the week, but bulls proved unable to tackle liquidity at $23,400 and beyond.
This liquidity has remained in place on the day, as evidenced by data covering Binance’s order book provided by on-chain monitoring resource Indices of Materials.
BTC/USD order book data (Binance). Source: Material Indicators / Twitter
“Markets rallied to close yesterday as Bitcoin’s latest H4 candle showed weakness of resistance and printed a bright star,” famous trader Mark Cullen summed up on recent events.
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“Personally, I am still waiting for the lows to be swept. But if BTC can close $H above 23.4k, I will be looking for a higher push.”
Michael Van de Poppe, founder and CEO of trading firm Eight, was also encouraged by Bitcoin’s reaction. He told his Twitter followers that day that $23,300 has turned into a stronger support, which means that the recent bitcoin price correction is “over.”
BTC/USD is trading around $23,200 at the time of writing, with the countdown to the return of volatility continuing.
Golden Cross vs. Death Cross to solve the problem in “few days”
Looking ahead, the rest of the week had few significant macro signals for the cryptocurrency markets.
Related: Bitcoin Takes ‘The Lion’s Share’ As Institutional Flows Hit a 7-Month High
As Cointelegraph reported, all eyes are already on next week’s inflation data, which comes in the form of the Consumer Price Index (CPI) printed for January.
At the same time, chart analysts were hoping for a positive result from the latest “golden cross” of Bitcoin on the daily chart – for the first time since September 2021. However, in the meantime, the BTC/USD weekly timeframes continued to print “Death Junction,” a phenomenon that often preceded more downswings in the past.
“Many say Death Cross/Golden Cross Lagging Indicator. It’s lagging behind for those who just think Golden Cross means going up, and Death Cross means Bearish. I use this indicator to understand momentum,” fellow trader Gibbon wrote in part of a dedicated Twitter thread about This topic is on February 7th.
Jibon compared the current setup to previous instances in 2015 and 2019 and added that it would take “a few days” for the impact of the crossovers to become more noticeable.
