After a promising start to the week, when Bitcoin returned over $20,000 and, more anecdotally, Dogecoin’s value more than doubled in a few days, cryptocurrency investors were discouraged when Bitcoin swiftly hit a technical ceiling as part of its recovery.
Indeed, as we can see on the daily chart below, the 100-day moving average, which is now hovering around $20,800 and acts as an immediate technical barrier for Bitcoin with the threshold of 21,000 $, has very clearly stopped the ascent of BTC/USD.
The high from September 13 at $22,750 and the high from mid-August just beyond $25,000 will be the next upside objectives for Bitcoin if it manages to break above this resistance level. On the downside, $20,000 is the first significant support to take into account, followed by the lows of this year, which were at $17,600, and $18,200 (lows of September 21 and October 13).
This week’s top news for Bitcoin traders is the Fed meeting.
The Fed meeting on Wednesday night, however, may either support the beginning of the bounce seen by last week in Bitcoin and the whole cryptocurrency market, or, on the other hand, cause it to resume its downward path with potential for fresh hollows.
In reality, market expectations about central bank policy continue to be the primary factor shaping this year. It will be remembered that Fed rate rises have significantly contributed to the depreciation of Bitcoin and cryptocurrencies in general this year. cryptocurrency and hazardous investments in general.
The market anticipates that the Fed will increase its benchmark interest rate by 0.75% at its meeting on Wednesday. The market went into prior Fed meetings expecting a rate rise of almost exactly 0.75%, but the prognosis for this meeting is less solid.
According to the Investing.com Fed Rate Barometer, investors now expect a rate increase of 0.75% with an 80% chance, up from a probability of well over 90% before prior increases. Fed gatherings
This implies that confirmation of a 0.75% rate increase might have a greater detrimental effect on Bitcoin than prior Fed rate increases.
Traders will be looking for any hints to sharpen expectations for the Fed’s next meeting in December, the final one of 2022, in addition to the Fed’s rate decision for November.
In fact, according to the Investing.com Fed Rate Barometer, investors are about as likely to predict a 0.75% rate rise as a 0.50% rate hike. Expect to see Bitcoin appreciate, at least momentarily, if the market projects a 0.5% rate increase for December as a result of the Fed’s words on Wednesday.
However, if the Fed’s statements and projections prompt investors to project a further rate increase of 0.75% for December, Bitcoin should suffer.