Bitcoin Surges to $39K, Marking Highest Level Since May 2022 on Fed Rate Hike Speculation

In a notable rally, Bitcoin reached $39,000 on December 1, achieving a peak not seen since mid-2022. The surge was fueled by market enthusiasm following the latest commentary on inflation from the United States Federal Reserve. Fed Chair Jerome Powell, speaking at Spelman College in Atlanta, Georgia, expressed caution about prematurely ending rate hikes.

Powell emphasized the Federal Open Market Committee’s commitment to lowering inflation to 2% and maintaining a restrictive policy until confident in achieving that goal. Despite Powell’s measured tone, his comments appeared to uplift sentiment regarding risk assets and the U.S. economy.

The Kobeissi Letter provided a tempered perspective on the Fed’s potential actions, indicating a preference for a cautious approach rather than risking inflation resurgence. Bitcoin capitalized on the positive mood, in contrast to its muted response to earlier U.S. macro data releases.

As the next FOMC meeting approaches in mid-December, market expectations, according to CME Group’s FedWatch Tool on December 1, overwhelmingly favored a pause in rate hikes.

Examining Bitcoin markets, trader Daan Crypto Trades highlighted the sell-side liquidity involved in the brief ascent to $39,000. Keith Alan of Material Indicators shared insights into BTC/USDT order book liquidity, revealing significant resistance at $39,000 and $39,200, with notable buyer support at $38,000.

Traders anticipated a potential daily close above $38,000 as a strong signal, with expectations extending beyond $39,000. Analysts, including BitQuant and Crypto Ed, foresee Bitcoin’s departure from its previous trading range, with potential upside targeting at least $39,200 in the near term.