Yesterday, bitcoin crossed the level of $27,400. This became the highest level since August 31. Today, the price has dropped slightly, but is still holding above the $27,000 mark.
The bullish trend that started at the beginning of the week can be attributed to investors' expectations of the upcoming meeting of the U.S. Federal Reserve (Fed). There is a high probability that the Federal Open Market Committee (FOMC) will temporarily pause interest rate hikes.
Markets expect the Fed to almost certainly keep interest rates at the 5.25-5.50% level, focusing on the central bank's outlook.
The Federal Open Market Committee will present its interest rate decision at 18:00 GMT. Fed Chairman Jerome Powell is scheduled to hold a press conference at 18:30 GMT.
According to IG's market strategist, Yeap Jun Rong, real U.S. Treasury yields have remained at high levels until today in anticipation of the upcoming Fed meeting. This reflects a general strategy of preparing for a possible pause in rate hikes by the regulator.
Meanwhile, a surge in oil prices has heightened concerns about inflation and the belief that the Fed will extend its hold on high interest rates, Rong said.
The growing number of applications for bitcoin exchange-traded funds (ETFs) has attracted investors' attention worldwide and is considered a key factor in the overall expansion of the cryptocurrency market. The increasing interest in bitcoin ETFs is the main driver for the rise in the price of BTCUSD.
During the current month, the price of bitcoin has risen by 2.5%, which adds up to a cumulative 61% year-over-year increase.
If the Fed does not hike the interest rate today, the price of the digital currency may exceed $28,100.
BTCUSD is correcting in a broad upward channel on the D1 timeframe. The price has pulled back from the trend support, forming a new trend in the direction of the resistance.
Short-term prospects for BTCUSD suggest buying.
The target is at the level of 30 000.
Part of the profit should be taken near the level of 28 100.
A stop-loss could be placed at the level of 24 320.
The bullish trend is short-term, so trade volume should not exceed 2% of your balance.