Bitcoin’s price hiked after the Federal Reserve announced a rate hike that was less significant than those seen at previous meetings and still indicated that continual hikes are possibly warranted. However, the king currency was pulled down as the dollar rallied with the return of risk aversion, which caused investors to have a sentiment that was relatively bearish.
On Wednesday, the Federal Reserve increased its target fed funds rate by 0.5%, bringing it up to a range of between 4.25% and 4.5%.
This move was in accordance with the expectations of Wall Street. According to reports, the members of the Federal Open Market Committee do not anticipate a change from rate rises to rate cuts until the year 2024.
Bitcoin is now trading in a bearish direction, despite having just broken over a crucial level of resistance located around $18,150 Bitcoin’s price, however, plummeted below the $18,000 level after the Fed’s statement that it will raise interest rates.
This points to the possibility that the current pattern of sales will continue. BTC is trading at $17,708 at the time of this writing, which represents a decrease of roughly 1% in the previous 24 hours.
What On-Chain Data is Suggesting?
According to on-chain data, the ‘Bitcoin (BTC) Spent Output Value Bands: All Exchanges’ measure suggests that the quantity of whale deposits on cryptocurrency exchanges is dropping.
Typically, the development of the bottom of the Bitcoin market is caused by whales selling their BTC holdings by transferring them to cryptocurrency exchanges.
After a bear market that lasted for a whole year and witnessed enormous sales by whales and miners, Bitcoin is now starting an accumulation cycle before the next halving.
In point of fact, it is anticipated that institutional investors would discreetly purchase the downturn in a manner similar to the accumulation cycle that occurred in 2019-2020.
Cryptoquant’s analysis says:
“In terms of spending, the continued high level of whale spending is contradictory with a sign that could lead to a market cycle change. An upward sustained price trend is typically accompanied by whales holding their bitcoins.”
In a related development, according to the findings of a survey conducted by a reputable crypto analytics platform, despite the fact that 2018 was a difficult year for the majority of the cryptocurrency market, there does not seem to be a shortage of believers that 2023 would give a chance for recovery.
The cryptocurrency monitoring website CoinMarketCap is now conducting an end-of-year wrap-up survey. Participants were asked to submit their votes according to whether or not they anticipated the next year would be bullish or bearish, and more than eighty percent of the respondents voted ‘bullish.’
Is Now a Good Time to Buy?
Bitcoin traded in a narrow band between $18,500 and $20,000 between September and October. However, after the stunning collapse of the crypto exchange FTX, bitcoin plunged 26% at one point.
For anyone wondering whether this is a good time to purchase Bitcoin, I wouldn’t recommend it. The overall macroeconomics for bitcoin is unfavorable. On-chain/flow numbers for bitcoin are quite bearish.
As a result, if you have a time horizon of two to four weeks, it is certain that now is not the greatest moment to purchase bitcoin. Unless you’re aiming for long-term gain.
As such, you may purchase and then be ready to hold on for dear life for months, when ideally the situation would have become much better.