Bitcoin's price experienced a decline, briefly falling below the $29,000 level, just before the FOMC meeting, during which a potential 25 basis point rate hike was under discussion. The cryptocurrency's value dropped to as low as $28,897 before recovering slightly to trade around $29,115.
Although Bitcoin's price managed to regain support at $29,000, uncertainty looms regarding the likelihood of an uptrend continuation, primarily due to resistance expected at the 50-day Exponential Moving Average (EMA) currently set at $29,362. The Moving Average Convergence Divergence (MACD) indicator suggests a possible upside, but traders are cautious about bearish crosses on the horizon.
The outlook for Bitcoin's price remains bearish as it hovers within the $29,000 to $30,000 range. Adding to the negative sentiment is the Relative Strength Index (RSI), which is rapidly declining toward the oversold region. Traders may seize the opportunity for profitable short positions targeting $28,000 and $25,000, and the upcoming decision on interest rate hikes by the Federal Reserve may further impact Bitcoin's price action.
As the FOMC meeting draws near, investors are proceeding with caution, leading to a narrow trading range. The probability of a 25 basis point rate hike and concerns about inflation are influencing market sentiment. Potential further rate hikes by the Federal Reserve could exacerbate existing challenges in the crypto market.
To revive enthusiasm in the Bitcoin market, traders are in search of new catalysts. Edward Moya, a senior market analyst at Oanda, emphasizes the need for such driving factors. Apart from the FOMC meeting, investors are also keeping a close eye on the Consumer Confidence Index (CCI) and upcoming reports on jobless claims and personal Consumption Expenditures (PCE) later in the week. Furthermore, while the Bitcoin mining hash rate currently faces stagnation, on-chain analytics firm CryptoQuant assures that this occurrence is not uncommon and historically, the price has recovered alongside increased buying pressure during price adjustments.
Recent developments in the crypto market, particularly the fluctuations in Bitcoin's price, can significantly impact Forex and crypto traders. Active participants in the Forex market may find opportunities to hedge or speculate on Bitcoin's price movements by trading cryptocurrency pairs like BTC/USD. The uncertainty surrounding the FOMC meeting and potential rate hikes by the Federal Reserve can also influence overall market sentiment, leading to fluctuations in Forex currency pairs. Forex traders should closely monitor these events and economic indicators mentioned in the news to make well-informed decisions and capitalize on market movements. The relationship between Bitcoin's intrinsic value and its mining hash rate, as mentioned by CryptoQuant, could also provide valuable insights for Forex traders seeking to understand the broader sentiment in the cryptocurrency market.