The Bitcoin price has been moving sideways over the past two days, but market participants expect volatility over today’s trading session. During its Federal Open Market Committee meeting, the U.S. Federal Reserve will announce another increase in interest rates.
Bitcoin trades at $20,000. The price of Bitcoin has seen sideways movements in the last 24hrs and a profit of 2% over seven days. The crypto market generally follows the same trend except for Dogecoin, which has been trending by itself.
Macros Forces Are Ready to Takeover Bitcoin Price Action
Market participants price in an interest rate rise of 75 basis points (1.75%) bps. All the uncertainty centers around the post FOMC press conference.
The pre-FOMC meeting nerves are still present in traditional markets. Crypto is holding up well, with absorption at lows.
The FOMC announcement is due in 1.5 hours time – that will be followed by the press conference 30 minutes later – be prepared for volatility! pic.twitter.com/vw3dC3u5cv
— tedtalksmacro (@tedtalksmacro) November 2, 2022
Jerome Powell, the Fed chairman and another senior member of financial institution will give insight to their economic outlook during this event. Fed officials can either stay in line with expectations or exceed them. They may also announce more aggressive monetary policies.
NewsBTC reports that this is not the most likely outcome. The Fed faces backlash from U.S. International, but Powell and other Fed officials are determined to slow down inflation. The metric reached a 40-year high and threatens to continue wreaking havoc across the world’s economies.
There are signs the Fed could pivot, or at the very least take a more dovish approach, in the coming months. This is the trend of other central banks. The Fed following suit would prove bullish for Bitcoin’s price.
The market participants have priced in a higher chance of a December hike. accordingCaleb Franzen, analyst:
Why is the financial market pricing in +0.75% tomorrow and +0.5% December. 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. The King Fisher Data shows a spike in downside liquidity for Bitcoin.
If there’s further downside pressure (as shown in the chart below), liquidity is available at $19,000-20,000. These liquidity levels could be used if markets move to the short side. Leverage positions are less liquid on the upside.
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.