Bitcoin (BTC), the cryptocurrency, extended its two day decline after the Federal Open Market Committee’s (FOMC minutes) confirmed the Fed’s decisions to hold “the target range for the federal funds rate at 3-½ to 3-¾ percent.”
As long as the Fed continues to pursue its goal “maximum employment and inflation at the rate of 2 percent over the longer run,” FOMC minutes are cited as the “developments in the Middle East” Factors that fuel an atmosphere “uncertainty” In assessing the monetary policy, the Fed emphasized its wish to preserve flexibility. “risks to both sides of its dual mandate.”
New statements highlighted in FOMC Minutes. Source: CNBC
Bitcoin was still volatile throughout Powell’s press conference, despite the Fed’s decision to hold rates.
Hyblock CEO Shubh Varma describes the price change as “the usual sell the news reaction after the FOMC,” BTC “quickly recovered to pre-announcement levels within hours, showing strong underlying conviction.”
Varma added data to support his view of the market.
“The global bid ask ratio spiked to 0.3 (one of the highest readings), while open interest fell on the price drop. This is classic post-FOMC position squaring and stop-hunt behavior rather than conviction selling.”
BTC/USDT ratio of global bid-ask. Source: Hyblock
Support will it turn into opposition?
BTC fell to an intraday low of $74,937 after the FOMC minutes had been published. This was slightly lower than the simple 20-day moving average ($75.664), which some traders deemed crucial to confirm BTC’s flip from support to resistance.
Cointelegraph published a report on Monday about the following: break above the channel resistance BTC needed consecutive daily candles above the trendline on the chart. Then, a support level between $76,500 and $75,500 was required.
BTC/USDT 1-day chart. TradingView
While the previous has occurred, the failure to recapture 20-MA or close above trendline resistance can be seen as an indication of a loss of momentum within the bull trendBitcoin can now test the bottom of this channel, which is only four months old.
Related: Bitcoin falls as traders cut risk ahead of FOMC: Will Tradfi, spot ETF volumes bolster $70K support?
Glassnode analysts observed that Bitcoin traders had increased their bearish leverage prior to Powell’s press conference. citing The funding remained neutral, and there was a divergence in the cumulative volume delta between spot and futures markets.
Bitcoin traders are turning bearish before the FOMC minutes. Source: Glassnode/X
Glassnode The Week Onchain: Analysis by Glassnode depicted Bitcoin price movement as “trapped below market mean,” It is possible to form rallies if the demand for $65,000 – $70,000 can be sustained, but there are no large enough numbers.
Bitcoin, according to the report failed to exceed its True Market Mean at $79,000. An increase in short-term profit-taking, combined with margin futures that have been sold net short has diminished Bitcoin’s bullish short-term momentum.
BTC short-term holders realized profits, adjusted for BTC’s entity. Glassnode
Analysts said that while these factors have increased Bitcoin’s vulnerability to a more severe downside, institutional flows in spot BTC-ETFs and the rising CME Open Interest has helped build a “dense accumulation cluster between $65K and $70K.”
CME open interest, US spot ETF AUM position change. Source: Glassnode
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Source: cointelegraph.com
