Bitcoin resilient after Fed decision; World Bank snubs El Salvador

The price of Bitcoin remained below $40,000 on Thursday after the Federal Reserve interest rate decision on Wednesday evening. The central bank brought forward their expectations for the first interest rate hike into 2023, with focus on their language around inflation.

“Inflation has risen, largely reflecting transitory factors,” the Committee said, while upgrading their forecasts for PCE (the Fed’s preferred method of measuring prices) over the next three years.

The Fed were more hawkish than some had expected, and the news lifted the US Dollar and appeared to put a ceiling on the price of the world's largest cryptocurrency in the near-term.
Bitcoin ETF Delay

Further putting a lid on cryptocurrency prices for now was news that the US Securities and Exchange Commission (SEC) had again delayed its decision on approving the VanEck Bitcoin ETF by 45 days, the second time it has extended the review period on the VanEck application.

“In rejecting numerous Bitcoin ETF applications, the SEC has continually stated concerns over fraud and manipulation in the underlying Bitcoin spot market,” Nathan Geraci, president of the ETF Store, recently told CoinDesk in an interview.

The introduction of a Bitcoin ETF would be seen as a further sign of cryptocurrencies hitting the mainstream and open further opportunities for institutional investment.

World Bank snubs El Salvador

Another piece of news that grabbed the attention of cryptocurrency traders on Thursday came from El Salvador, the country that recently passed the Bitcoin Law enabling Bitcoin to be used as legal tender in the country.

The Central American state requested support from the World Bank to help put the infrastructure in place to make it possible, but the World Bank rejected their request, partly due to environmental concerns.

“While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,” a spokesperson for the World Bank said.
Technical view

From a technical standpoint, a firm break and close above $40,000 remains a key level, with the 200DMA at around $42,800 also one to watch.

Above that, the 50DMA comes in at $43,700 and the two levels are continuing to converge towards a ‘Death Cross’, a technical chart pattern traditionally seen as a sell signal as momentum in the underlying asset fades.

Other major cryptocurrencies were all showing similar price action with Ethereum, Dogecoin and XRP trading steady after the rally seen during the start of the week.