Crypto Market Awaits FOMC Meeting: Bitcoin’s Response and Whales’ Stablecoin Actions
Crypto News – Bitcoin price bulls are making a strong comeback after facing resistance at $27,200 earlier this week. Investors are closely monitoring whether BTC will secure a position above $27,000, maintaining momentum towards $31,000. Alternatively, it might drop to seek more liquidity around the significant support levels at $25,000 and, if pressured, extend the downward trend to $22,000.
Anticipating Bitcoin’s Response to the FOMC Meeting
The cryptocurrency market is eagerly awaiting the Federal Open Market Committee (FOMC) meeting, anticipating potential impacts on Bitcoin price and the broader crypto market.
According to economists cited by Reuters, the Federal Reserve is expected to halt interest rate hikes for the second time this year, while keeping the option open for future increases by year-end. Presently, the Federal Reserve’s benchmark interest rates fluctuate between 5.25% and 5.5%.
Previous remarks from FOMC meetings indicated that after the initial pause in June, the Fed was considering two more rate hikes to combat persistent inflation before the year’s end. The first hike took place in July, and some market observers speculate a skip in September before potential consideration of a second hike.
Bitcoin has maintained a steady uptrend since the release of the August Consumer Price Index (CPI) data, indicating a slowdown in inflation. However, price surges attributed to rising crude oil costs present conflicting signals, with many committee members recognizing “significant upside risk to inflation.”
On the weekly chart, the discussed Bitcoin fractal earlier in the week is unfolding. Although facing rejection at $27,200 led to a swift retracement below $27,000, the upper range limit served as support, enabling BTC to navigate fresh liquidity and regain the $27,000 support.
The 200-weekly Exponential Moving Average (EMA) (purple) at $25,609 signifies an improving market structure for Bitcoin. A breakout to $31,000 could occur if bulls establish the 21-week EMA (red) and the 100-week EMA (blue) as support, before the next fractal potentially pushes the price below the $30,000 level.
Critical trend indicators like the SuperTrend and the Money Flow Index (MFI) confirm the bullish sentiment. The SuperTrend assesses market volatility, while the MFI compares the money flow volume into and out of BTC markets.
As long as the SuperTrend trails Bitcoin’s price while providing support, and the MFI maintains the uptrend towards the overbought region, the odds favor a significant uptrend.
Rising Institutional Adoption of Bitcoin?
Interest among institutional investors continues to surge, even amidst the crypto winter and multiple market capitulations. This interest is fueled by the drive for a spot Bitcoin exchange-traded fund (ETF), attracting major global firms such as Blackrock, Fidelity Investments, and Franklin Templeton, among others.
Santiment suggests that Bitcoin’s ongoing price action above $27,000 received a boost from the launch of an Adoption Fund for institutional investors by Nomura, Japan’s largest bank.
The increasing number of institutions seeking exposure to Bitcoin is anticipated to have a positive long-term impact on its price. However, in the short term, insights from Santiment reveal that “whales have been reducing their holdings of stablecoins,” potentially hampering the uptrend, given their diminished buying power compared to when Bitcoin was above $30,000 back in June.
The stablecoin supply held by whales, with a balance exceeding $5 million, currently stands at its lowest level in the last six months. To facilitate a substantial upswing in Bitcoin price, these whale addresses must increase the supply they hold.
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