Bitcoin

Brace For Impact, Bitcoin Price Holds At $20,400 Ahead Of FOMC

The Bitcoin price has been moving sideways over the past two days, but market participants expect volatility over today’s trading session. The U.S. Federal Reserve (Fed) will announce another interest rate hike during its Federal Open Market Committee (FOMC) meeting.

At the time of writing, the Bitcoin price trades at $20,400 with sideways movement in the last 24 hours and a 2% profit over the previous seven days. In general, the crypto market is moving with the same sentiment except for Dogecoin (DOGE), which is trending on its own.

BTC’s price moving sideways on the daily chart. Source: BTCUSDT Tradingview

Macros Forces Ready To Take Over The Bitcoin Price Action

Market participants know and price in a new interest rate hike at 75 basis points (0.75% bps). The uncertainty revolves around the post-FOMC press conference.

Traditional markets have the pre-FOMC meeting jitters. Crypto holding up quite nicely, with absorption at the lows.

The FOMC announcement is due in 1.5 hours time – which will be followed by the press conference 30 minutes later – be prepared for volatility! pic.twitter.com/vw3dC3u5cv

— tedtalksmacro (@tedtalksmacro) November 2, 2022 

During this event, Fed Chairman Jerome Powell and another high member of the financial institution will provide insight into their economic perception. The Fed representatives can stay within expectations, further hikes in 2022, exceed them, or announce a less aggressive monetary policy.

As NewsBTC reported yesterday, the latter is the least likely scenario. The Fed is facing backlash from the U.S. international, but Powell and others are adamant about slowing down inflation. The metric reached a 40-year high and threatens to continue wreaking havoc across the world’s economies.

However, there are potential signs that the Fed might pivot or, at least, take a dovish approach in the coming months. Other central banks are taking this route. If the Fed follows, the decision would be bullish for the Bitcoin price.

Market participants are pricing in higher a possibility of a lower hike in December, according to analyst Caleb Franzen:

Why are financial markets pricing in +0.75% tomorrow, +0.5% in December, and +0.25% in January 2023, then pause? These hikes equal an aggregate of +150bps…

Again, the markets expect further hikes, so any sign of dovishness could trigger an extension of BTC’s current bullish momentum. Data from King Fisher shows a spike in downside liquidity for Bitcoin.

In case of further downside pressure, as seen in the chart below, there is a lot of liquidity at around $19,000 to $20,000. These levels will be tapped if the market takes the short side. The upside presents less liquidity from leverage positions.

In other words, if there is volatility, there is a higher chance of it trending to the downside based on King Fisher’s data alone.

Source: TheKingFisher

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