Bitcoin Price Analysis: Key Levels to Watch as Fed’s Decision Approaches

Bitcoin Price Analysis: Will the Fed’s Decision and PCE Data Spark a Rally?

Bitcoin Price Analysis – Bitcoin (BTC) has managed to maintain its position above the crucial $100K level, despite the ongoing uncertainty surrounding the upcoming macroeconomic updates. Investors are closely watching the Federal Reserve’s (Fed) interest rate decision and the Personal Consumption Expenditure (PCE) inflation data, both of which could significantly impact Bitcoin’s price trajectory.

Fed’s Potential Decision and Market Expectations

The market is largely expecting a rate pause from the Fed, with traders pricing in a >99% chance of no rate cut. However, Matt Mena, a crypto research strategist at 21 Shares, pointed out to AMBCrypto that a surprise 25 basis point (bps) cut could act as a catalyst for a rally, especially for risk assets like Bitcoin. He stated, “Given the recent turmoil in equities, the likelihood of a rate hike is effectively zero. However, a surprise 25bps cut could act as a major tailwind, sparking a rally across risk assets.”

Impact of Trump’s Call and FOMC Guidance

The market will also keep a close eye on the Federal Open Market Committee (FOMC) and Chair Jerome Powell’s press conference. The fact that President Donald Trump has openly called for rate cuts adds further intrigue to the situation. According to Mena, if the Fed signals multiple rate cuts, it could push Bitcoin above $110,000, potentially testing key psychological levels at $125,000 and $150,000.

PCE Data and Bitcoin’s Reaction

Another significant factor influencing Bitcoin’s short-term price movements is the PCE price index, which is set to be released on January 31, the day after the Fed’s meeting. A cooler-than-expected PCE data release could trigger a rally in Bitcoin’s price, while higher-than-expected inflation could cause a pullback.

Current Market Sentiment and Price Action

On the price chart, Bitcoin has remained within the $100K-$105K range since January 17. It continues to hold above key Moving Averages (MA), reinforcing a positive outlook. However, a drop below the 50-day MA of $98K could set the stage for a decline towards the $91K range.

In conclusion, the next 48 hours could be pivotal for Bitcoin, as traders and investors react to the Fed’s decisions and the PCE inflation data, making for potentially volatile market conditions.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.