Analyst Says Bitcoin (BTC) Is Weakening, But Crypto Markets May Rise This Week After Fed Meeting
A popular analyst weighs in on how the Federal Reserve’s upcoming policy meeting will affect both Bitcoin (BTC) and the broader economy.
The anonymous host of InvestAnswers first tells his 444,000 YouTube subscribers that all eyes will be on Chairman Jerome Powell during the Fed’s three-day retreat in Wyoming, noting that markets are likely to rally if interest rates don’t rise again.
“We really need to be aware of the fact that Jerome Powell is in Jackson Hole at the economic conference. He will provide some much-needed clarity on the market and the Fed’s path.
It’s probably the most important catalyst of the week for both stocks and crypto. Remember, if we get a hint of skill, the market will go up.”
The analyst believes the Fed can only raise interest rates by a total of 1% or risk causing irreparable damage to the economy.
“The last time I read the Fed minutes, there was so much fluff that it could basically be interpreted as the Fed wanting to slow down their interest rate hikes. But don’t get too excited. We are still in very restrictive territory.
But my thesis remains: there’s no more than 100 basis points left in the budget, and if they go beyond that, it’s economic armageddon.”
The InvestAnswers host then presents a Bitcoin channel chart dating back to mid-June. He observes how BTC was trending up within the range until it fell hard last week, flashing a double bottom.
“This is the channel you’ve seen me share many times over the past six weeks. From the bottom, in, out, beautiful ranking rider all the way up the rising channel.
We crashed through it last week. I said it must support, if not it can be ugly. We crashed through, but we dropped to a very interesting level. We had that visit over $25,000 and then straight down.
These are daily red lights and you can see the number of red days we have had. But what is very important is the support level around $20,750.”
The crypto guru notes that Bitcoin previously fell to around the $20,750 level four weeks ago, also revealing a double bottom. He is concerned that BTC may lose steam after the rally that began in late July stalled on August 18.
“We had the double bottom for the last five days. That matches the bottom we had about four or five weeks ago, which is a positive sign that maybe this $20,000, $21,000 support level can hold.
But the momentum is definitely weakening right now for Bitcoin, no doubt about it. We are outside that area. The question is what will happen now?
I expect that for the next week or so, until we find out what the Fed is doing, we’re probably going to chop sideways. And if they come out with bad news, it could go down to $20,000.”
At the time of writing, Bitcoin is trading flat and priced at $21,506.
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