Bitcoin Holds Steady Ahead of FOMC Announcement
Bitcoin’s price remained stable on Tuesday as investors scaled back their activity in anticipation of the Federal Open Market Committee (FOMC) announcement tomorrow. The Federal Reserve will disclose its intentions on interest rates, taking into account the recent rally in Treasury yields and its impact on the markets.
Most analysts expect the central bank to maintain rates, but there is a growing belief that a rate hike could be possible as the Fed seeks to address the rising inflation in recent weeks. Stocks traded positively ahead of the announcement, with the S&P, Dow, and Nasdaq all recording gains at the closing bell.
Data shows that Bitcoin’s price has been consolidating between $34,045 and $34,695, indicating the possibility of an upcoming breakout. Analysts predict that the major move will be to the upside. Technical analysis also suggests a bullish pattern forming on the daily bar chart, giving Bitcoin bulls the near-term advantage.
This week, markets are anticipating a potentially volatile period of trading due to the non-farm payroll (NFP) week in the U.S. NFP weeks are known for heightened market volatility, which presents both opportunities and risks. Notable macroeconomic data to watch for this week include non-farm payrolls, the unemployment rate, average hourly earnings, labor force participation rate, initial jobless claims, manufacturing and service sector PMIs, and consumer sentiment and confidence.
Bitcoin’s weekly chart shows a strong upward push, with two strong weekly candles indicating strong buyer activity. The analysts believe that Bitcoin has the potential to move higher, with resistance zone levels serving as key targets. However, if a retracement occurs from the red resistance zone ($37.5-47k), they would no longer be interested in buying the dips.
Zooming into the one-hour chart, day traders are advised to focus on the current trading range. The range equilibrium (EQ) is seen as support, and as long as the price remains above it, an upward movement towards the range high is expected. However, if the price falls below the EQ, it may move towards the range low, presenting opportunities for long positions.
Overall, Bitcoin’s price remains range-bound, indicating the possibility of a retest of the range low. Traders are closely following the market and waiting for a breakout above $34,500 to trigger upward momentum.
The majority of tokens in the top 200 recorded losses on Tuesday, as traders engaged in profit-taking ahead of the FOMC announcement. However, there were a few standout performers. Status (SNT) saw a significant increase of 85.3%, trading at $0.054. MobileCoin (MOB) gained 20.3%, while SushiSwap climbed 18.9%. On the other hand, Polymesh (POLYX) experienced the largest loss with a decline of 31.8%. FLOKI fell 9.3%, and MAGIC dropped 8.6%.
The overall cryptocurrency market cap currently stands at $1.28 trillion, with Bitcoin’s dominance rate at 52.8%.