On the morning of a Fed meeting that might be significant for all global markets, including the cryptocurrency market, Bitcoin remains negative in the near term.
Remember that BTC/USD hit a low of $20.738 yesterday night, the lowest since July 16. Bitcoin had therefore plummeted about 15% from yesterday’s low since last Wednesday’s top of $24,276.
Most observers blame Bitcoin’s decline on tonight’s Fed meeting, which is likely to result in another 0.75 percent rate rise, as well as overall risk aversion due to soaring inflation and worries of a worldwide recession.
This suggests that a BTC relief rally is not out of the question if the Fed just follows market expectations and does not make any hawkish surprises. As the old stock market adage goes, the market may “buy the news after selling the rumor” in this scenario.
Another subject that had an impact on Bitcoin yesterday was the release of the IMF’s July 2022 Global Economic Outlook, which predicted a dramatic slowdown in global growth, which is estimated to average 3.2 percent this year and 2.9% in 2023.
“The danger of recession is particularly substantial in 2023, when GDP is predicted to bottom out in numerous nations, household savings amassed during the epidemic will have dropped, and even minor shocks might slow economies,” we can read in the report.
Bitcoin technical levels to keep an eye on
The first level of support to evaluate on the BTC/USD chart is the $20,750 level, which corresponds to yesterday’s low and the July 17 low. Before the big psychological hurdle of $20,000, the $20,400 zone will be the next possible support apparent in hourly data.
On the upside, the first clear barrier is $21,600, followed by the psychological level of $22,000, over which Bitcoin would begin to test the downtrend line that has guided its movement since last week.