The Bitcoin price has been moving sideways over the past two days, but market participants expect volatility over today’s trading session. At its Federal Open Market Committee Meeting (FOMC), the U.S. Federal Reserve, (Fed), will announce another rate increase.
The Bitcoin price is currently trading at $20,000. There has been sideways movement over the past 24 hours, and an average profit of 2% in 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
The market participants are aware of the new interest rate increase at 75 basis points (0.75 bps) and they price it in. All the uncertainty centers around the post FOMC press conference.
Pre-FOMC meetingjitters still affect traditional markets. Crypto is holding up well, with absorption at low levels.
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 representatives have the option of delivering on their expectations. Further hikes can be announced in 2022 or they may exceed them.
NewsBTC yesterday reported that the second scenario is unlikely. 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.
But there could be signs that the Fed may pivot in the future or take at most a dovish stance over the next few months. Similar moves are being made by other central banks. Bitcoin prices would benefit if the Fed followed suit.
Participants in the market are pricing higher the possibility of December’s lower rate hike. accordingCaleb Franzen, analyst:
Why do financial markets price in +0.75% tomorrow; +0.5% in Dec; +0.25% January 2023 and 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.
As you can see in the below chart, liquidity levels range from $19,000 to $22,000 in case there is further downside pressure. 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.