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• The Federal Reserve of the United States (Fed) raised interest rates this week, weakening the US dollar and causing Bitcoin to drop.
• Technical analysis suggests that while the dollar may strengthen, there is a high risk of reversal in Bitcoin’s price action.
• Investors should wait for a break below a pivotal area marked in blue on the BTC/USD chart before entering into any positions.

The Fed Raises Interest Rates

The Federal Reserve of the United States (Fed) has raised the funds rate once more this week – this time, by 25bp. The decision triggered a selloff in the US dollar, which lost ground against its peer fiat currencies. Also, it lost ground against Bitcoin as well. The reason for the greenback’s weakness was the message that disinflation in the United States had already begun. As such, the fight against rising inflation appears to be over, and so the Fed approaches the terminal rate for this tightening cycle.

Dollar Strengthens Despite Fed Decision

But the dollar’s weakness proved to be shortlived. The next day following the Fed’s decision, the dollar strengthened. Nothing changed from the Fed’s point of view, but investors suddenly decided it was time to buy