On Wednesday, after the Federal Reserve decided to increase interest rates by 75 basis points, bitcoin rose sharply and cleared the $23,000 level. This confirms prior predictions by analysts that the FOMC meeting would have no impact on bitcoin or even result in a relief rally. And we are definitely seeing a relief rally.

Since the beginning of April, bitcoin had been trading under a descending resistance line, even reaching the low price of $17,622 on June 18th. But since then, the bitcoin price has mostly been moving upwards and broke out from said line on July 18th. Although the price has seen some fluctuations, it rebounded significantly.

The Fed’s recent meeting did not have the negative effect that some people thought it would have. It appears that a 75 basis point increase was already widely expected. There might have been a decrease in price if the Fed had instead raised it by 100 basis points.

The S&P 500 and Nasdaq indices shot up 2.6% and 4.1%, respectively. If they see increases in an environment where interest rates are raised, why would bitcoin not be expected to increase too? Since the last quarter of 2021, bitcoin started to become correlated to the S&P 500. At first, the 90-day correlation was at 0.2 which was not a very significant correlation until it was at 0.6, which is quite a significant correlation.

Markets are forward-looking, so there is nothing stopping the bitcoin price from starting an upward trend. The most likely short-term wave count suggests that bitcoin has completed wave two of a five-wave upward trend. It is currently entering into a third wave and some analysts expect that the bitcoin price could increase all the way to $29,500.

On Twitter, Michaël van de Poppe posted the three ideal ingredients for a “summer relief rally.” The three ingredients are: Powell becoming dovish and more data-dependent; the Ethereum merge coming up in September and the collapses of 3AC, Celsius and another contagion in the market already priced in. With these three scenarios in place, he predicts bitcoin getting to $28,000 – $30,000.

Over the last 24 hours, Bitcoin’s price has stayed above the $21,000 support zone. It started a new price rally after forming a base at the $21,000 level and moved above the $22,000 resistance level and as of today, it crossed the $23,000 resistance zone and shot up to almost $24,000.

Bitcoin is trading at $23,800 as of publishing this article.