Bitcoin price was trading higher on Wednesday, breaking out from its two-consecutive day decline. At the time of writing, the largest cryptocurrency by market cap was trading 2.71% higher at $23,769.78. BTC has declined more than 2% in the past week but remains more than 43% higher in the year to date. Bitcoin’s dominance has edged higher over the past 24 hours.

Economic Sentiment

Data by CoinMarketCap shows that the global crypto market cap, as well as the total crypto market volume, has increased over the last day. This has been boosted by Bitcoin’s performance in the past 24 hours. Over the last day, BTC’s market cap has increased by nearly 2%, while the total volume of the digital asset traded climbed 12%.

Most cryptocurrencies have remained steady amid fears that the US Federal Reserve is likely to embark on its aggressive interest rate hike in a bid to fight inflation. Traders are betting that the Fed will increase its interest rates to 5.50% by the end of summer, higher than the central bank’s forecast at the end of December.

An interest rate hike to 5.50% implies at least two more quarters of percentage point hikes from March, as the current range is 4.50% to 4.75%. US Treasury yields have been rallying recently as investors await key economic data. the 10-year Treasury yield was trading at 3.985% on Wednesday, its highest level since the first half of November.

Economic activity in the manufacturing sector in February, the fourth consecutive decline, following 28 months of growth. The closely watched ISM Manufacturing Purchasing Managers Index (PMI) came in at 47.7% in February, 0.3% higher than January’s reading but below analysts’ estimates of 48%.

The Manufacturing PMI has been hovering below its lowest level since May 2020, in the last two months. Recent economic data shows that pressure from rising prices is continuing, and this could prompt the Fed to hike interest rates. As such, risky assets such as Bitcoin price could fall further. Investors have now shifted focus to the US Initial jobless claims data, set to be released tomorrow.

Bitcoin Price Analysis

The 4-hour chart shows that the Bitcoin price has been struggling to find direction amid various macroeconomic factors. BTC hit an intraday high of $24,000 earlier on Wednesday before pulling back.  The digital asset is trading slightly above the 25-day and 50-day moving averages, while its Relative Strength Index (RSI) remains below the neutral zone.

Therefore, while the BTC price struggles to find direction in the short term, the next key levels to watch will be the resistance and support levels at $25,265.50 and $22,721.15, respectively.