Bitcoin consolidates at $23,000 as the market puts the focus on the Fed

There are mixed signals in the cryptocurrency market at the moment. Bitcoin (BTC) has rebounded 0.15% in the last 24 hours and remains above $23,000, while Ethereum (ETH) has dropped more than 1% and moves away from $1,600.

US macroeconomic data continues to provide no clear support for the reigning cryptocurrency. The latest US GDP reading shows that growth in the world's leading economy moderated over the past three months, while labor market data suggests the opposite. All in all, Bitcoin regained $23,000 and everything seems to indicate that it will not change the trend in the fourth term: during the last week, the rally is 9%, while so far this year it has risen by 35%. Many experts still do not believe that these rises are sustainable, while others maintain the opposite opinion.

"Bitcoin pared losses as soft-landing hopes returned following better-than-expected US GDP data. Bitcoin still looks poised to consolidate here until next week’s FOMC decision," stated Edward Moya, senior market analyst at Oanda.

This is also the view of Naeem Aslam, chief market analyst at AvaTrade, as he believes that the weakness of the U.S. dollar is behind this rally in cryptos. "The change in the Fed’s monetary stance brought weakness in the dollar index. In addition, speculators believe that Bitcoin’s winter is over," the expert explained. According to CME's FedWatch tool, there is a 98% probability that the central bank will raise interest rates by 25 basis points.

For Jason Pagoulatos, partner at research group Delphi Digital, "the market knows that rate hikes are going to continue, but at a slower pace until they reach their terminal rate." "The main question people are trying to get clarity on is how long and then what that ultimately means for indicators that are still showing signs of strength such as the labor market," he noted.

"The price mark which matters the most is the 30K price level. This is an important resistance level which the price needs to break and move to the upside," Aslam commented.

Likewise, the experts at Julius Baer stressed that it is just as "likely" that cryptocurrencies are "over the worst" of the crypto-winter as it is that "the wounds of this crisis will take longer to heal." "The FTX fiasco in November rightfully unleashed an avalanche of scepticism towards CEXs’ management of customer deposits and reserves. In reaction they transitioned into a proof-of-reserves conviction, listing some of their wallet addresses to provide transparency about the size and composition of their reserves," they sentenced.

In this regard, it should be noted that Coinbase was fined €3.3 million by the Dutch central bank (DNB) for failing to comply with anti-money laundering and terrorist financing laws by providing services on Dutch territory for almost two years without registering with the DNB. On the other hand, Binance remains under the scrutiny of US authorities.

Finally, it should be noted that Tesla closed its second consecutive quarter without selling any Bitcoin after divesting the 75% it held last summer.

In other market news, the performance has been mixed. Ripple (XRP) and Dogecoin (DOGE) fell slightly and Solana (SOL) dropped 2%, while Polygon (MATIC) soared 9%. MATIC rose about 45% in 2023 amid a spike in daily transactions, while the Polygon platform has the second-highest number of daily active users (DAU), according to Token Terminal data.