A Look at Bitcoin, the Crypto Market Ahead of Fed Rate Decision: What to Watch – Bitcoin (BTC/USD)

Bitcoin BTC/USD traded lower on Tuesday after falling below the $19,000 level during Monday’s 24-hour trading session.

Monday’s drop turned out to be a buying opportunity for the bulls, prompting the apex cryptocurrency to close the session slightly higher. On Tuesday, the bulls were relatively weaker, although all price action took place within Monday’s range, putting Bitcoin into an inside bar pattern.

An inside bar often indicates that consolidation is taking place. There are a number of tools one can use for technical analysis, including from Ninja Trader. Ninja offers advanced charts and other products as part of its trading suite designed to help investors navigate the markets. The platform allows members to automate and execute trades and to test trading ideas through simulation.

Bitcoin’s consolidation is likely in anticipation of the Federal Reserve’s upcoming decision on how high to raise interest rates, expected Wednesday at 2pm EDT.

Consumer price index data released by the US Labor Department last week showed inflation remained higher than expected in August, despite four separate interest rate hikes starting in March, May, June and July. The news brought fears that the Fed could raise interest rates by 0.75% or even by a full percentage point later this week.

Following the decision, Bitcoin — and the stock market — volatility may increase. Bitcoin’s further direction, at least in the short term, is likely to be known. It should be noted that the initial reaction to smaller timeframes may be a “fake out” and traders should exercise patience.

When Bitcoin chooses its direction, which is likely to be in sync with the S&P 500, the rest of the crypto market is likely to follow suit.

Do you want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Bitcoin Chart: Bitcoin began trading in a downtrend on September 13 and has made a consistent series of lower highs and lower lows. Bitcoin’s most recent low was formed on September 17 at $20,183 and the most recent low was printed at the $18,255 level on Monday.

• During Tuesday’s 24-hour trading session, Bitcoin printed an inside bar pattern, which leans bearish because the overall trend is down. Traders can look for a break up or down from Monday’s mother bar on higher than average volume on Wednesday to gauge future direction.
• If Bitcoin breaks bullishly from inside the bar pattern, the crypto will regain the eight-day and possible 21-day EMAs as support, giving bullish traders more confidence going forward. If the crypto fails to regain the indicators as support, the eight-day EMA could continue to push Bitcoin lower.
• Bitcoin has resistance above at $19,915 and $21,313 and support below at $17,580 and $16,000.

See also: So will Dogecoin reach 10 cents again by 2023? The survey says…

Photo via Shutterstock.