federal reserve

Custodia Bank’s membership denied for ties with crypto markets, says US Fed

The United States Federal Reserve released an 86-page report on March 24 detailing the reasons for denying Custodia Bank’s application for membership.

The United States Federal Reserve released an 86-page report on March 24 detailing the reasons for denying Custodia Bank’s application for membership in January, including the bank’s involvement in the crypto space. 

According to the report, the Fed’s board has raised “concerns about banks with business plans focused on a narrow sector of the economy,” with a high concentration of activities related to the crypto industry. The report states:

“Those concerns are further elevated with respect to Custodia because it is an uninsured depository institution seeking to focus almost exclusively on offering products and services related to the crypto-asset sector, which presents heightened illicit finance and safety and soundness risks.“

The document also states that Fed members must align their risk management systems and controls with the activities described in their business plans. Based on the Fed’s purview, “Custodia had not yet developed a sufficient risk-management framework for its proposed crypto asset-related activities, nor had it addressed the highly correlated risks associated with its undiversified business model.“ 

If accepted as a member of the Fed system, Custodia Bank would be further forbidden to run crypto-related services “given the speculative and volatile nature of the crypto-asset ecosystem” that is not consistent with the purposes of the Federal Reserve Act.“ The report states:

“Further, if the Board were to approve Custodia’s membership application, it would prohibit Custodia from engaging in a number of the novel and unprecedented activities it proposes to conduct —at least until such time as the activities conducted as principal are permissible for national banks […].“

In response to the report, Custodia Bank’s spokesperson Nathan Miller told Cointelegraph the “recently released Fed order is the result of numerous procedural abnormalities, factual inaccuracies that the Fed refused to correct, and general bias against digital assets.“

Miller also said the decision is a demonstration of the Fed’s “shortsightedness and inability to adapt to changing markets.“ Miller further said that “perhaps more attention to areas of real risk would have prevented the bank closures that Custodia was created to avoid. It is a shame that Custodia must turn to the courts to vindicate its rights and compel the Fed to comply with the law.” 

The Fed’s report is 14x longer than its previous longest denial order and 41% longer than the Fed’s longest order on any subject, the bank claims. In late January, the Fed denied a membership request from Custodia Bank, as well as a second application in February, claiming that its application “was inconsistent with the required factors under the law.” 

Update (on March 25, at 4:44 pm UTC): This article has been updated to include Custodia Bank’s response.

US Treasury’s Financial Stability Oversight Council held unscheduled, closed meeting

Heads of all major U.S. financial regulatory agencies gathered by video to hear a presentation by New York Fed staff that concluded that the banking system “remains sound.”

The United States’ most powerful financial regulators gathered on March 24 by video conference for an unscheduled, closed meeting of the Treasury Department’s Financial Stability Oversight Council (FSOC), the department announced in a statement. Treasury Secretary Janet Yellen convened the meeting.

Details were sparse in the Treasury statement, but it said Federal Reserve Bank of New York staff gave a presentation on market developments. The gist of the presentation was reassuring:

“The Council discussed current conditions in the banking sector and noted that while some institutions have come under stress, the U.S. banking system remains sound and resilient.”

In addition, the council discussed member agencies’ efforts to monitor financial developments.

The functions of the FSOC under the law are “identifying risks to the financial stability of the United States; promoting market discipline; and responding to emerging threats to the stability of the U.S. financial system.”

Markets have reacted sharply to practically every word she and meeting attendee Federal Reserve Board Chair Jerome Powell have uttered publicly as concern about the American banking crisis spread.

List of meeting attendees. Source: U.S. Department of Treasury Office of Public Affairs

House Financial Services Committee Subcommittee Chairs Andy Barr and Bill Huizenga sent a letter to Yellen on March 24 asking for the unredacted minutes of the March 12 FSOC meeting and a special March 10 meeting with council “leaders” to discuss the collapse of Silicon Valley Bank and other information.

Barr and Huizenga criticized the FSOC’s transparency and added, “FSOC’s failure to maintain its own website or issue its own press releases blurs the distinction between your role as Chairperson of the FSOC and as Secretary of the Treasury.”

Related: US Financial Stability Oversight Council identifies stablecoins and cryptos as threats to financial system

The FSOC has repeatedly urged Congress to pass legislation regulating crypto, calling for lawmakers to decide which regulator will oversee the crypto spot market and urging Congress to close regulatory gaps.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Fed balance sheet adds $393B in two weeks — Will this send Bitcoin price to $40K?

The U.S. central bank’s liabilities may increase if more regional banks fail, creating an upside scenario for the price of Bitcoin.

As of March 22, the United States Federal Reserve’s balance sheet has surged by nearly $94.5 billion — a $297 billion increase from the last week when the banking crisis started.

New QE hopes boost Bitcoin’s price

Overall, the U.S. central bank’s liabilities have increased by $393 billion in the last two weeks to $8.734 trillion. That is closer to the all-time high of $8.95 trillion a year ago when the Fed started its quantitative tightening program and reduced its assets by $600 billion.

Federal Reserve balance sheet as on March 24. Source: FRED

The Fed released the data on March 23, coinciding with Bitcoin’s (BTC) price rallying 5.5% toward $29,000. The rise occurred amid speculations that the Fed’s expanding balance sheet results from quantitative easing (QE).

BTC/USD daily price chart. Source: TradingView

But the Fed did not use new dollar reserves to purchase long-term Treasurys. Instead, the central bank dropped its U.S. Treasury holdings by $3.5 billion to $7.937 trillion, suggesting that quantitative tightening is still in place to curb inflation.

On the other hand, the Fed’s balance sheet grew because it dispatched short-term loans to the ailing banking sector.

Notably, as of March 22, the Fed slashed the usage of its “discount window,” which helps commercial banks manage short-term liquidity needs, by $42 billion. Instead, it allocated the same $42 billion to its brand new Bank Term Funding Program (BTFP).

Federal Reserve BTFP funding reserves. Source: FRED

The other $60 billion went to the Fed’s swaps facility that provides liquidity to offshore banks.

Foreign official repo agreements at the Fed. Source: FRED

The Fed’s tightening policy and lending facilities to regional and offshore banks risk drying up cash liquidity. This may boost the dollar’s valuation versus other top foreign currencies, which, in turn, could push Bitcoin’s price lower in the short term.

Interestingly, the U.S. dollar index has gained 1.5% since the Fed’s balance sheet update.

DXY daily price chart. Source: TradingView

Has the banking crisis peaked?

The ongoing credit crisis may not have peaked, despite Fed’s $393 billion emergency lending to banks, if one considers Janet Yellen’s blurred outlook on depositors’ insurance.

On March 21, the U.S. Treasury Secretary confirmed protecting uninsured depositors over $250,000 “if smaller institutions suffer deposit runs” such as those witnessed with Silicon Valley Bank and Signature Bank. 

But Yellen did a U-turn the next day in her statements to the Senate, saying she had not considered “blanket insurance or guarantees of deposits.” Bank stocks tanked in response to her statement, resulting in another U-turn.

KBW Nasdaq Bank Index weekly performance chart. Source: TradingView

Yellen then told the House on March 23 that the authorities “would be prepared to take additional actions if warranted.”

In any case, the market will need to wait for the balance sheet data next week to determine whether or not the Fed’s liabilities are declining.

But if these emergency lending facilities keep rising after more bank collapses, then QE will be inevitable, similar to what happened after the 2008 global financial crisis.

BTC price technicals hint at $40,000

An expanding balance sheet — with or without QE — has proven bullish for Bitcoin in the past. This correlation will continue if the banking crisis deepens, according to Stack Hodler, the author of the crypto-focused Stack Macro newsletter.

Fed balance sheet vs. Bitcoin price performance. Source: TradingView

“BTFP, Swap Lines, TPI – It’s All QE,” the analyst noted, adding:

“It all leads to balance sheet expansion and fiat currency dilution despite plenty of Central Bank fans that will tell you otherwise.”

From a technical perspective, Bitcoin price is well positioned for a run up to $40,000 by June, or 50% higher than today’s price.

BTC/USD weekly price chart. Source: TradingView

As illustrated above, the upside target originates from Bitcoin’s inverse head-and-shoulders breakout setup on the weekly chart.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin erases Fed losses as traders eye $40K BTC price target

BTC price snaps back into its uptrend after Bitcoin market nerves over U.S. economic policy fade in line with stocks and gold.

Bitcoin (BTC) returned to near $29,000 on March 23 as bulls ignored news of a fresh United States regulatory crackdown.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin shrugs off Coinbase, Do Kwon arrest

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD gaining almost 8% versus its overnight lows to challenge nine-month highs on Bitstamp.

The pair kept the volatility coming as the dust settled on the prior day’s interest rate decision and associated commentary from the Federal Reserve.

Despite Fed Chair Jerome Powell giving mixed signals over how and if rate hikes would continue, crypto market commentators argued that the sudden drop that Bitcoin witnessed had been over-the-top.

“Make sure to remember the panic and calls for lower next time you get a dip during a HTF uptrend,” popular trader Crypto Chase wrote in part of Twitter analysis.

Among those now eyeing the continuation of the uptrend was Crypto Ed, who saw Bitcoin filling its retracement zone.

The mood even managed to stay positive despite news that U.S. regulator the Securities and Exchange Commission had begun targeting crypto firms, notably Coinbase, stocks of which fell 20% at the Wall Street open.

Related: Hindenburg Research reports Block short position, claiming fraud facilitation and inflated metrics

The reported arrest of Do Kwon, founder of blockchain firm Terraform Labs, responsible for the 2022 Terra implosion, likewise failed to dampen performance.

“You can try to fade it, but we’re just gonna keep sending from here,” fellow trader Kaleo added in the latest of his characteristically bullish BTC price takes, having reiterated that $40,000 was a “magnet” price target.

Risk assets return with a bang

Bitcoin and cryptocurrencies like Litecoin (LTC) were not the only assets enjoying a rebound on the day.

Related: US enforcement agencies are turning up the heat on crypto-related crime

U.S. stocks attempted to cancel out their own post-Fed losses, with the S&P 500 up 1.2% on the day at the time of writing. 

Gold, meanwhile, hit $195.15, gaining an impressive 3.1% versus the daily lows before and edging closer to a $2,000 rematch.

XAU/USD 1-hour candle chart. Source: TradingView

“We’re still in the vacuum of relief, the ‘Echo’ bubble. The period where the potential process of pausing hikes remains to be bullish and there’s no clear recession, until reality kicks in,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, summarized.

Van de Poppe agreed that $40,000 was now a longer-term target for BTC/USD.

Magazine: Best and worst countries for crypto taxes — Plus crypto tax tips

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Banks and the Fed have a problem — What about crypto?

Join us as we discuss the problems faced by the banks and the Federal Reserve and whether they will translate into problems for the crypto market.

In this week’s episode of Market Talks, Cointelegraph welcomes Dave Weisberger, CEO and co-founder of CoinRoutes. Weisberger has over 35 years of experience in market structure, quantitative finance and trading automation. He started his career at Morgan Stanley where he built its first program and electronic trading systems. Weisberger is a strong economic freedom advocate and digital asset believer.

We start things off with our main topic for today: the banks and the United States Federal Reserve and the problems they are currently facing. Crypto seems to be unaffected by this at the moment, but is there a possibility that their problems could translate into problems for the crypto space?

For those of you who are still a bit confused about what happened with Silvergate, Silicon Valley Bank and others, we ask Weisberger to break it all down for us and also explain why the Fed had to step in. We then take a look at the Fed’s balance sheet and explain what it means and if the Fed is reversing its quantitative tightening progress.

With some of the major crypto-friendly banks being dismantled, where does it leave investors, builders and crypto-focused businesses? Are they potentially going to be left unbanked and out at sea?

Bitcoin (BTC) and Ether (ETH) have been steadily moving up for a few weeks now. Usually, black swan events, regulatory FUD and strong macro headwinds negatively impact Bitcoin’s price, so it was a pleasant surprise when Bitcoin chose to move up. We get Weisberger’s opinion on this and whether he thinks this upward price movement is sustainable.

We also discuss some positive things happening in the crypto space at the moment that could possibly translate into a more robust, trustable industry and, of course, money in the pocket of holders.

We cover all this and more, so make sure to stay tuned until the end because Cointelegraph Markets & Research will also be taking your questions and comments throughout the show, so be sure to have them ready to go.

Market Talks streams live every Thursday at 12:00 pm ET (5:00 pm UTC). Each week, it features interviews with some of the most influential and inspiring people from the crypto and blockchain industry. So, head on over to Cointelegraph Markets & Research’s YouTube page and smash those Like and Subscribe buttons for all our future videos and updates.

Bitcoin price whipsaws as Fed says rate hikes may not be ‘appropriate’

Bitcoin sees swift fluctuations after the Fed hikes 0.25%, but Chair Jerome Powell hints that policy may now change.

Bitcoin (BTC) saw heavy volatility on March 22 as the United States Federal Reserve hinted that it might stop interest rate hikes.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Powell on rates: “‘May’ and ‘some’ instead of ‘ongoing’”

Data from Cointelegraph Markets Pro and TradingView showed sharp moves both up and down for BTC/USD as the Fed hiked by an anticipated 25 basis points.

During a press conference, Fed Chair Jerome Powell appeared to play down the ongoing U.S. banking crisis and its aftermath while hinting that the day’s interest rate hike may be the last.

In prepared remarks, Powell said that the Fed believes that “events in the banking system over the past two weeks are likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes.”

“It is too soon to determine the extent of these effects, and therefore too soon to tell how monetary policy should respond,” he stated.

“As a result, we no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation. Instead, we now anticipate that some additional policy firming may be appropriate.”

BTC/USD initially saw local lows of $27,867 on Bitstamp around the events before returning to trade above $28,000, only to continue falling at the time of writing as markets continued to digest Powell’s responses to press inqueries.

On rate hikes specifically, he said that the terms “may” and “some” as opposed to “ongoing” would be best to describe future policy.

Reacting, some commentators nonetheless described Powell’s Fed as “hawkish” in prioritizing inflation above the banking crisis by continuing hiking.

“The Fed have shown thus far, that they are committed to rates higher for longer + inflation as enemy #1,” Tedtalksmacro wrote in part of Twitter follow-up.

BTC price comes full circle

Bitcoin, thus, did not deliver the trip to $30,000 some had hoped for in the run-up to the rate hike decision.

Related: Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

“Shorts liquidated then longs liquidated. Back to the same price we were an hour ago,” analyst Matthew Hyland summarized.

Data from monitoring resource Coinglass put the total crypto liquidations for the day at $36 million and $78 million for shorts and longs, respectively.

Crypto liquidations chart. Source: Coinglass

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin $30K bets greet FOMC as analyst warns over long liquidations

Bitcoin may celebrate no matter what the Fed decides on interest rates, but one analyst worries about the extent of longs that would be liquidated below $20,000.

Bitcoin (BTC) may “take out shorts” to crack $30,000 during the day’s key United States macroeconomic policy updates, analysis says.

As bets pile up over how BTC’s price will react to the Federal Reserve’s decision on interest rates, $30,000 is in sight — but a drop to below $20,000 is not off the table.

Trader plans $30,000 profit-taking

Bitcoin is hours away from what popular trader Crypto Tony calls “one of the most anticipated” Fed meetings ever.

The Federal Open Market Committee (FOMC) will decide how to tweak baseline interest rates on March 22, amid suspicions that the ongoing U.S. banking crisis has disrupted policy.

From ongoing rate hikes forecast just last month, markets are now considering the chances that the Fed will pause the cycle, data from CME Group’s FedWatch Tool shows.

Fed target rate probabilities chart. Source: CME Group

This would be a key boon for risk assets, as the Fed would be tacitly implying that the eighteen months it has spent removing liquidity from the economy has not been the silver bullet to recovery.

Liquidity is already on the up thanks to the failure of several banks, Cointelegraph reported, with a chunk of the quantitative tightening (QT) removals undone in a single week.

“So FOMC today which means one thing, VOLATALITY. No doubt we will trend sideways util the meeting, which means tread cautiously,” Crypto Tony told Twitter followers in comments on the day.

“My main play is to take profit at $30,000 if it comes.”

BTC/USD annotated chart. Source: Crypto Tony/Twitter

Markets commentator Tedtalksmacro meanwhile laid out the probabilities of each Fed path and the likely impact on risk assets.

“Slow grind upwards on Bitcoin, which means that my eyes are still focused on $28,700,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, continued.

“I’m expecting us to sweep into that high around FOMC and then we’ll have some consolidation. CME gap at $28,700 too.”

BTC/USD annotated chart. Source: Michaël van de Poppe/Twitter

Van de Poppe referred to a so-called “gap” in CME Group’s Bitcoin futures markets formed when the price began a new trading week in a different position than it finished the week prior. Historically, the spot price has gone up or down to “fill” such gaps.

The gap in focus was created in June 2022, data from TradingView confirms.

CME Group Bitcoin futures 1-day candle chart. Source: TradingView

“Do you really want to get bullish?”

Adopting a more conservative view, however, popular analyst Justin Bennett warned that the current spot price trading range represents significant historical resistance.

Related: Bitcoin hits new 9-month highs above $28K as markets flipflop over FOMC

A “squeeze” of shorts could result in $30,000 appearing, he acknowledged, but a sudden dive could have the opposite effect, with longs betting that $20,000, at least, will hold.

“Look, maybe we see BTC take out short liquidations up to $30k,” Bennett summarized.

“But do you really want to get bullish at macro resistance with a massive block of long liquidations sub $20k? I don’t.”

An accompanying chart showed the extent of liquidations triggered by such a move below the $20,000 mark.

Bitcoin liquidation levels annotated chart. Source: Justin Bennett/ Twitter

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Bitcoin hits new 9-month highs above $28K as markets flipflop over FOMC

Bitcoin price action targets $28,500 with “all classes” buying BTC, but the odds of the Fed pausing rate hikes are decreasing by the hour.

Bitcoin (BTC) headed to new nine-month highs after the March 21 Wall Street open as a crucial Federal Reserve interest rate decision loomed.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Bitcoin price climbs despite conservative Fed view

Data from Cointelegraph Markets Pro and TradingView showed BTC/USD approaching $28,500 on Bitstamp.

The latest in a succession of multimonth highs, the latest BTC price action precedes what promises to be a volatile day for markets.

The Fed will announce how far — if at all — it will hike its baseline interest rate on March 22, with a pause in the hiking cycle seen as a boon-in-waiting for risk assets.

“Heavily interested to see the outcome of tomorrow,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, wrote in part of a Twitter update.

“Potential sweep into the highs, closing CME gap, trapping everyone & creating bearish divergences is an ideal concept. Key zone $28,700.”

BTC/USD annotated chart. Source: Michaël van de Poppe/Twitter

Bitcoin nonetheless produced interesting moves on March 21, with the dollar gains coming alongside volatility in overall crypto market cap dominance.

“Altcoins bleeding, while Bitcoin is still consolidating around the highs. Not the signs you’d want to see,” Van de Poppe warned earlier.

“Money rotating from altcoins towards Bitcoin amid fears for tomorrow’s FOMC meeting. I’d stay relatively calm on positions as well. Obvious opportunities will arise.”

The subsequent comedown after the Wall Street open was described by popular trader Crypto Tony as an “interesting dump on BTC Dominance creating a spike in Altcoins.”

Bitcoin crypto market cap dominance, 1-hour candle chart. Source: TradingView

The mixed signals reflected market ideas for the Federal Open Market Committee (FOMC) meeting. According to CME Group’s FedWatch Tool, most now foresee a 25-basis-point rate hike, as opposed to the pause favored previously.

Fed target rate probabilities chart. Source: CME Group

“All classes” buying BTC

Analyzing trader behavior, on-chain monitoring resource Material Indicators meanwhile revealed blanket buying on the largest global exchange Binance.

Related: Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

A snapshot of the BTC/USD order book showed both large-volume and small-volume increasing exposure pre-FOMC.

$28,500 and $29,000 formed the strongest resistance levels at the time of writing, while the nearest significant support was further from the spot price at $27,000.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

US exploring ways to guarantee the country’s 18T of bank deposits: Report

The current deposit insurance cap under the FDIC is $250,000, but recent banking collapses have seen calls to increase that amount.

U.S. officials are reportedly studying ways to expand the current scope of deposit insurance that would guarantee all U.S. bank deposits should the current banking crisis worsen.

The current deposit insurance cap under the Federal Deposit Insurance Corporation stands at $250,000, however, following the collapse of several banks in March, there have been calls to increase that amount.

Organizations such as the Mid-Size Bank Coalition of America called on March 18 for the cap to be lifted for the next two years, citing a need to protect depositors and to stop capital being pulled from smaller banks for supposedly safer-looking heavyweights.

According to a March 21 Bloomberg report citing “people with knowledge of the talks,” Treasury Department staff members are currently discussing the possibility of the FDIC being able to expand the current deposit insurance beyond the max cap to cover all deposits. According to the FDIC, domestic U.S. bank deposits totaled $17.7 trillion as of December 31.

The move would ultimately hinge on what level of emergency authority federal regulators have and if the insurance cap can be increased without formal consent from Congress.

Bloomberg’s sources indicated, however, that U.S. authorities don’t deem such a drastic move necessary at the moment, as recent steps taken by financial regulators are likely to be sufficient.

As such, they stated that a potential strategy is being whipped up just in case the current situation gets worse.

In response to Silvergate, Signature Bank and Silicon Valley Bank going bust in recent weeks, the Federal Reserve rolled out the $25 billion Bank Term Funding Program (BTFP) on March 13, as the government pushed to stem any further contagion.

Related: UBS Group agrees to $3.25B ‘emergency rescue’ of Credit Suisse

Meanwhile, in a March 20 press briefing, White House Press Secretary Karine Jean-Pierre was specifically asked if the federal government was supportive of a push from small- and mid-size banks to expand FDIC insurance beyond $250,000.

But Jean-Pierrre was tight-lipped on the Biden Administration’s view, saying on that “our goal is to ensure the financial system is stable” and emphasizing that creating a fair playing field was the “focus of Treasury and the bank regulators.”

“And as you saw, due to our actions this week at the direction of the President, Americans should be confident of their deposits. We’ll be there when they — when they need them.”

“And — and so, again, that’s what our focus is going to be. We don’t have any new announcements at this time. But clearly, we want to make sure that our financial system is stable,” she added.

Will the Fed stop rate hikes? 5 things to know in Bitcoin this week

Bitcoin targets $30,000 as a new week of macro surprises gets going — what might happen next?

Bitcoin (BTC) starts a new week in an unmistakably bullish position as it passes $28,000.

Crypto markets continue to climb on the back of the banking crisis, which still rages in the United States and abroad — where will they go next?

After a week of chaos for macro markets and solid gains as a result, Bitcoin and altcoins are circling levels, which some have not seen for nine months.

The 2022 bear market is feeling like an increasingly distant memory as old resistance levels tumble and bulls attempt to cement newly-reclaimed support.

This week, as last, there are all sorts of potential hurdles to overcome — the Federal Reserve will decide on its next interest rate changes and new macroeconomic data will drop.

Markets will likely stay volatile as a result, and any further unexpected events from the banking sector will only add to the instability.

At the same time, Bitcoin’s own ecosystem is set to become stronger than ever as network fundamentals launch to fresh all-time highs.

Cointelegraph takes a look at five of the key phenomena to keep an eye on when it comes to BTC price action in the coming week.

Fed rate hike cycle in doubt

The macro event of the week is undeniably the March 22 Fed decision on interest rate hikes — or lack of them.

The Federal Open Market Committee (FOMC) faces a stark challenge to its current quantitative tightening (QT) policy in place for the past eighteen months.

The unfolding banking crisis has put into doubt the Fed’s ability to keep raising interest rates, a policy which commentators argue was the death knell for struggling regional banks.

The Fed is nonetheless caught between a rock and a hard place. Raising rates would keep inflation in check but further punish the economy, possibly unleashing a new wave of bank failures.

“Next week’s FOMC is gearing up to be one of the most interesting ones in a while, with no one really agreeing on what’s gonna happen,” engineer and trader Tree of Alpha summarized.

“Odds at leaning towards 25bps, but it’s a wildcard. Planning on longing =50 bps as the safe play.”

According to CME Group’s FedWatch Tool, consensus as of March 20 favored the Fed hiking by 25 basis points, rather than pausing hikes altogether. The week prior, Goldman Sachs had predicted that rates would plateau, while Nomura even forecast a rate cut.

Fed target rate probabilities chart. Source: CME Group

“This week, the long anticipated March Fed interest rate decision comes out. Currently, markets are pricing in a 62% chance of a 25 bps rate hike. However, markets also see 100 bps of rate cuts by December,” financial commentary resource, The Kobeissi Letter, wrote in part of analysis about the long-term rate hike roadmap.

Kobeissi and others also queried how struggling bank stocks would react at the next Wall Street open, given the latest government moves over the weekend.

These included a buyout of Credit Suisse, the European banking giant, which saw a particularly violent reaction to the U.S. meltdown.

“Credit Suisse, $CS, was worth $10 billion a month ago and sold for pennies on the Dollar,” Kobeissi continued about fellow bank UBS purchasing Credit Suisse and getting $100 billion in government liquidity.

“The government said $CS had ‘serious risk of bankruptcy.’ A shareholder vote was bypassed. Regulators knew it was a matter of hours for bankruptcy. This deal was made out of desperation.”

Bitcoin spot price eyes $30,000

With that, the mood on Bitcoin and crypto markets has understandably taken a fresh turn for the better as the week begins.

At the time of writing, BTC/USD traded above $28,400, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

Already at nine-month highs, the pair managed to beat out bears during a consolidation period last week to return to target levels not seen in almost a year.

Chief among these is $30,000, a psychologically significant level surrounded by considerable historical liquidity. For monitoring resource Material Indicators and others, meanwhile, a key support level to hold is the 200-week moving average (MA).

Popular trader Crypto Tony focused on $27,700 to support the bull case and potential for an attack on $30,000.

“$27,700 ensured we are now in the next range between $27,700 – $31,000. Using $27,700 as a level that bulls need to hold to sustain a move up to $30,000 level,” he tweeted.

“Interesting week for sure. My stop loss on my main long remains at $25,500.”

BTC/USD annotated chart. Source: Crypto Tony/ Twitter

In fresh analysis, meanwhile, fellow trader Crypto Chase highlighted $28,500 as a potential short entry, while also entertaining a “somewhat likely” bull case in which selling only kicks in above $33,000.

“Please note that I am not abandoning the idea of 28.5K~ shorts. These may still present a great opportunity around FOMC this Wednesday. At the moment though, I cannot imagine an immediate local top,” he explained.

“I think a rejection could occur there and I’ll still look for the trade, but for those who attempt to hold a 28.5K short back to 12K may end up stopped out in that 33K liquidity pool.”

BTC/USD annotated chart. Source: Crypto Chase/ Twitter

Analyst heralds end of bear market

For some analyzing the long-term picture, however, Bitcoin has already broken out of a bear market in place since the comedown from its all-time highs and the start of Fed tightening in late 2021.

The weekly close came in at just above $28,000, making it Bitcoin’s highest since early June, 2022.

BTC/USD 1-week candle chart (Bitstamp). Source: TradingView

For trader, analyst and podcast host Scott Melker, known as “The Wolf of All Streets,” this has clear implications.

“The bear market is officially over,” he proclaimed on the basis of the weekly chart data.

“$BTC made it’s first higher high ($25,212) since the all time high . That confirms a new bullish trend. Price can still go down, but that would be a new trend, not a continuation of the previous bear market. Congrats everyone.”

BTC/USD annotated chart. Source: Scott Melker/ Twitter

Melker linked to a similar post from August 2019, just after BTC/USD had passed $13,000 in a comeback from the pit of its previous bear market.

Equally buoyant about weekly timeframes is trader and analyst Rekt Capital, who continues to eye a disintegration of Bitcoin’s “macro downtrend.”

On quarterly timeframes, Rekt Capital is monitoring a “bullish engulfing” event in the making, something which has triggered significant upside in and of itself in the past.

New all-time highs due for Bitcoin difficulty

In a classic move, Bitcoin’s network fundamentals are refusing to abandon their trip to the moon.

The latest estimates from BTC.com and MiningPoolStats show that both hash rate and difficulty are in “up only” mode this month.

Bitcoin network fundamentals overview (screenshot). Source: BTC.com

Difficulty is set to adjust upwards 3.26% in the coming days, making it almost 45 trillion.

Hash rate hit a local peak on March 13, but is now trending upwards once again as miners respond to the latest price action.

Among miners, however, a divergence is playing out. On a rolling 30-day basis, miners’ BTC balances continue to decline, according to data from on-chain analytics firm Glassnode.

Bitcoin miner net position change chart. Source: Glassnode

The most greed since Bitcoin price was $69,000

There may still be reason to be afraid of the current bullish surge in Bitcoin and crypto more broadly.

Related: Bitcoin levels to watch as BTC price eyes highest weekly close in 9 months

A look at sentiment data suggests that the majority of the market is becoming overly confident in the good times continuing.

The Crypto Fear & Greed Index, which uses a basket of factors to produce a normalized sentiment score for crypto, is now at 66/100, firmly in its “greed” zone and its highest since November 2021.

Crypto Fear & Greed Index (screenshot). Source: Alternative.me

Its warnings are being corroborated by social media users. A survey from research firm Santiment, which has garnered almost 15,000 responses, shows that most believe that BTC/USD will break $30,000 as the next major crypto market event.

Santiment Twitter survey (screenshot). Source: Santiment/ Twitter

“Crowd bullishness is doubling up bearishness for crypto’s top 2 assets,” Santiment commented about the results.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.