Bitcoin Cools as U.S. Interest Rate Decision Looms. Could $30,000 Be Next?
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Bitcoin Cools as U.S. Interest Rate Decision Looms. Could $30,000 Be Next?

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All of this comes as the Crypto Fear and Greed Index — which measures sentiment among investors — reaches its highest level in a year.

Bitcoin Cools as U.S. Interest Rate Decision Looms. Could $30,000 Be Next?

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Bitcoin's bullish momentum is cooling down as the Federal Reserve prepares to decide whether it'll raise interest rates again.

The markets are widely anticipating that Chairman Jerome Powell will opt for a 0.25 percentage point rise on Wednesday.

But persistent concerns about elevated levels of inflation, when coupled with the crisis that has engulfed several U.S. banks, may give him pause.

BTC had accelerated to highs of $28,527 on Monday, taking the world's biggest cryptocurrency to its highest level since June 2022.

However, CoinMarketCap data shows it has been trading in a very tight range over the past 24 hours, and has largely remained pinned just below $28,000.

All of this comes as the Crypto Fear and Greed Index — which measures sentiment among investors — reaches its highest level in a year.

The index operates on a scale of 1 to 100 and is currently flashing a score of 68, meaning greed is seeping into the market and a correction could be due.

$30,000 Next?

A major test facing Bitcoin bulls will now involve cracking $30,000.

Analysts believe much of the recent upwards momentum in BTC's price has been linked to the banking crisis, with some regarding the digital asset as a safe haven.

The rally means that MicroStrategy — a publicly listed company that owns 132,500 BTC — is in a much less perilous position.

Earlier this year, the business intelligence firm was nursing billions of dollars in paper losses after Bitcoin's value fell.

But its crypto haul is currently worth $3.7 billion, not far off the $4 billion it has spent on amassing this Bitcoin since August 2020.

Assuming that BTC manages to smash through $30,000, MicroStrategy — helmed by executive chairman Michael Saylor — will be back at break-even.

Elsewhere, data from Glassnode shows that the number of entities that hold less than 10 BTC is continuing to rise — indicating that the threat posed by whales is becoming less pronounced.

Will Clemente, the co-founder of Reflexivity Research, commented:

"Over time, supply will continue to become more distributed, putting to rest any arguments against Bitcoin regarding supply concentration."

What Lies Ahead

Bloomberg Intelligence analyst Mike McGlone has claimed "the global banking calamity may mark Bitcoin's maturation from its birth following the great financial crisis."

McGlone, traditionally a bullish voice on BTC, noted that this digital asset has outperformed gold by a factor of 10x so far this year — and said this "may be indicative of a super cycle happening in crypto."

"A benefit the crypto has vs. most commodities is Bitcoin's nascent stage of low and rising adoption vs. diminishing supply."

This is a nod to the fact that Bitcoin has a fixed supply of 21 million coins — and most of them are already in circulation. The number of BTC that's unlocked on a daily basis through mining is set to be slashed by 50% when the next halving event takes place in 2024.

Predicting that BTC is more likely to follow the rules of economics and appreciate, McGlone added:

"Bitcoin is viewed more as digital gold in a world going that way and may be moving on from excessive speculation. The 2023 global banking crisis and rising potential for a significant economic reset may mark an inflection for the virtual asset that trades 24/7 and is no one's project or liability."
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