While the Bitcoin price moved sideways in October, it has experienced downside volatility. Market sentiment tends to be neutral on short timeframes with slight bullish movements. But, BTC is stuck at the same level for several months when the timeframe is longer.
Bitcoin trades at $19150 as of the writing. The last 24-hours have seen a loss of 2% and the price has experienced sideways movements over the last seven days. BTC’s price remains rangebound in its current levels and with occasional re-test of resistance at $20,500 due to macroeconomic conditions.
Bitcoin Price Sees Spike In Volatility
Bitcoin’s price dropped to $20,500 after the U.S. Economy posted higher than expected levels of employment. This is due to its resilience and Federal Reserve (Fed), monetary policy. Financial institutions have taken over responsibility for the financial sector.
Current economic discourse revolves around these same themes. How far will the Fed go to reduce inflation and bring down the markets? How much suffering can allies of the United States endure before they allow the institution to pivot?
The main story has many subplots, including one that shows a possible economic recession. There are already actors in crypto that expect the Bitcoin price will rally, as central banks keep their aggressive approach increasing the chance of breaking important components of the global economic system.
In that sense, the upcoming Fed Federal Open Market Committee (FOMC) meeting this Wednesday might provide more insight into the institution’s strategy. This event is probably driven by the Bitcoin price’s increase in volatility.
In the past, cryptocurrency has witnessed similar price movement before and after the event. Bullish price actions have occurred in the following days. The DXY Index may show a slight headwind for the cryptocurrency this time around.
The DXY achieved a monthly record for October on daily timeframes as it continues its upward trend. As of this writing, it appears that the dollar is poised to return to the region around 115. This would limit upside potential for Bitcoin and three other key global currencies: Euro, Japanese Yen and British Pound.
What Time Will the Fed Make a Pivot
To reduce the negative pressure, Bitcoin’s price must see a rebound in the U.S. Dollar. Risk-on assets as well as global currencies will continue to trade in the red, so long the dollar stays strong.
The Fed is under increasing pressure to end their interest rate rise program and monetary policy. The global market demands mercy from international organizations and hedge funds. But the Fed Chairman Jerome Powell seems determined.
Despite UN’s call for the Fed to halt hikes, J. Powell seem adamant to taming inflation – with no other objectives. Given the recession-fueled worries and this stance, equities have fallen to near oversold levels.
— AndreasStenoLarsen (@AndreasSteno) October 10, 2022
The Bitcoin price could see further volatility if Wednesday’s Fed decision is reaffirmed. To avoid a bigger drawdown, traders need to keep an eye on key support levels at $18,600 & $17,600.