Bitcoin price briefly reached $58,000 after Powell’s Fed Update

Bitcoin (BTC) prices rose on Tuesday in response to Federal Reserve Chairman Jerome Powell's semi-annual monetary policy report to the Senate Banking Committee.

The address came ahead of Thursday's US Consumer Price Index (CPI) inflation data, which is expected to be a major market move this week.

Bitcoin Tests $58,000 After Powell's Fed Update

Bitcoin may have to wait until Thursday to react significantly to US macro news, which is one of the four fundamentals that investors will look to for a recovery. On Tuesday, BTC tested the $58,000 range in response to Powell's testimony before returning to the $57,000 range.

The upheaval in Bitcoin prices comes as the Fed says it is not yet ready to cut interest rates. “Noting that more good information is needed to bolster confidence, he outlined a cautious approach to combating inflation. Powell also underlined the importance of seeing inflation move towards the 2% target in a sustained manner.”

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According to the Fed chairman, policymakers will pay attention to risks to inflation. You don't want to overdo it too soon. They don't want to ease too late as this could ‘unduly weaken the economy'.

We're pretty much fixing those two crashes. That's the main thing we think about these days,” Powell said.

Reiterating his determination to make decisions at the meeting, the chairman of the federation emphasized the careful evaluation of incoming data and the balance of risks. This, he said, would help steer an appropriate policy path towards price adjustment.

On the other hand, Powell acknowledged that the labor market remains strong and the economy is expanding at a strong pace.

June CPI data will come out on Thursday, July 11. It is expected to be 3.1%, down from 3.3% last month. Declining inflation will be a positive factor for BTC prices to rise.

Bitcoin investors are wary of low confidence

The cautious stance on Tuesday followed the first quarter data, which also indicated little confidence in the path of inflation. In a sign that the Fed is in no rush to cut rates, crypto markets briefly fell; HLack of confidence in the economy. This situation often leads investors to re-evaluate their investment strategies and favor assets that do not correlate with central bank decisions.

For now, technical indicators show that Bitcoin is trying to recover, but the bulls are to blame. A momentum indicator Relative Strength Index (RSI) position below 50 indicates this. However, with the higher lows on the RSI, coupled with the $54,450 support hold, a recovery is underway.

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Prominent trader and analyst Rect Capital shares his optimism. After the crash, Bitcoin is showing some initial signs of stability, he said. Keith Allan, founder of trading resources Material Indicators, echoes the importance of the $54,000 range as a support floor.

“This new Trend Precognition signal on Bitcoin's daily signal indicates that the price is unlikely to go lower than yesterday's candle ‘today'. To me, a push to $54,300 would be worthless,” Allen wrote.