Bitcoin Bounces Off $29,500 Support But Still Stuck In Recent Ranges: Will The Next Fed Meeting Shatter BTC’s Dream?
Bitcoin (BTC), the world’s first and largest cryptocurrency by market cap, has once again bounced off support in the $29,500 area and was last changing hands just above $30,000.
BTC has tested key short-term support in the mid-$29,000s multiple times so far this week, and bulls are now holding their ground.
The cryptocurrency has been stuck within the $29,500-$30,500 ranges for almost a week after reaching its highest level of the year last Friday at $31,800, fueled at the time by optimism about a US judge’s ruling on XRP in the SEC vs Ripple Labs lawsuit.
Range BTC trading conditions have not been too surprising this week, given the lack of notable macroeconomic events in the US.
Bitcoin’s short-term momentum would be enhanced if it could break above its 21-day moving average.
The 21DMA was just below $30,400 and has acted as strong short-term resistance on a few occasions in the last few days.
In fact, a break above here could open the door for a run higher towards the upper limits of bitcoin’s multi-week range at $31,000.
Luckily for those who have grown tired of the dull bitcoin market trading conditions in recent weeks, a big macro catalyst is set to appear next week that could trigger some breakouts.
Will the next Fed meeting break the dream of Bitcoin (BTC)?
While key US central bank officials have signaled there could also be another rise in September, most economists, and even a notable former Fed memberbelieves that this will be the last rate hike of the cycle.
according to him CME Fed Watch ToolUS money markets price an implied probability of around 84% that the Fed will leave interest rates unchanged in September after next week’s hike.
While the US job market is still very strong, which means rate cuts are unlikely any time soon (since a strong job market helps stave off recessions and is inflationary), Recent Positive Developments Related to US Inflation they have convinced most market participants that another hike in September will not be necessary.
The Fed is likely to want to keep its options open for another hike in September, should inflation start to rise again.
But the central bank may take a softer tone on the need for more rate hikes, which would be taken as a nod to the fact that the market may well be right not to bet on more rate hikes.
Next week’s meeting could mark a key turning point in the US and global macrocycle.
A point at which we transition from a world of tighter financial conditions to a world of looser financial conditions.
The anticipation of this turning point has been a major tailwind for bitcoin in 2023, after aggressive Fed tightening in 2022 was credited as the main bearish catalyst for the bitcoin market.
Bitcoin bulls expect animal spirits related to easier financial conditions to return to the cryptocurrency market next week.
That, combined with optimism about institutional adoption in the wake of recent bitcoin ETF filings from Wall Street heavyweights BlackRock and the recent partial SEC defeat at the hands of Ripple, could be enough to send bitcoin to new yearly highs.
Traders should also note that bitcoin’s long-term bullish technical setup (a strong uptrend for 2023) also adds to the bull case, as do several widely followed on-chain indicators that over the past few months have been sending strong signals that we are in an early-stage bull market.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all your capital.