The price of Bitcoin (BTC) has doubled in the first half of 2023 after weathering the crypto winter of 2022. During the past week, a successful breakout emerged above the vital $30K resistance level.
Currently, the Bitcoin bulls are enjoying a rally for several days but markets have been in consolidation mode for nearly a month, which brings forward the million-dollar-question: Is it time to take out profits, or does this BTC rally have more in store for traders and investors?
BTC/USD – Daily Time Frame
There are several market drivers and conditions which shape and/or influence Bitcoin, notably the macroeconomy. The overall economic climate and monetary policy decisions are influencing market movements in the traditional setting and also in cryptocurrencies.
Persistent interest rate hikes, continuing weakness in the banking sector and concerns over debt ceiling serves has positioned Bitcoin as a noteworthy alternative to traditional capital assets.
What’s the FED up to?
Overall, the U.S. Federal Reserve has bumped interest rates by more than 4 percentage points since March 2022 to bring down the red-hot inflation the nation has witnessed, which was the highest in four decades.
After the latest interest rate hike of 25 basis points in early May, the Fed may hike interest rates once more, according to San Francisco Fed President Mary Daly’s remarks made during an event at the Brookings Institution:
"We're likely to need a couple more rate hikes over the course of this year to really bring inflation" sustainably back to the U.S. central bank's 2% goal.”
What’s the SEC up to?
After its lawsuit frenzy, the United States Securities and Exchange Commission (SEC) has approved several Bitcoin ETFs and other types of crypto exchange-traded funds. But so far, the market regulator has only greenlighted funds which track cryptocurrency futures or own the stocks of companies with indirect exposure to crypto assets.
Meanwhile, Wall Street investors are calling for a spot Bitcoin ETF. The market uncertainty over the SEC’s negative decision on the spot ETF may in fact cause an immediate reevaluation of the Bitcoin’s price, but it may not be crystal clear as to whether BTC will bump higher or skid lower amidst the uncertainty.