FOMC decision will push Bitcoin up or down? The $30,000 Question

As the next Federal Open Market Committee (FOMC) meeting approaches on March 22, Bitcoin (BTC) is trading at $28,000, just below the nearest resistance level. The cryptocurrency is consolidating in a critical zone, indicating the potential to continue its current trend or a possible pullback to $25,000.

Tomorrow‘s FOMC is priced at an 80% chance of a 25 basis point (bps) rate hike. According to a recent mail by crypto trading firm QCP Capital, the consensus has shifted to what analysts suggested last week, with no decision on a hike from the FOMC or a surprise cut.

In the latter scenario, QCP Capital believes a rate cut could cause more market panic and lead to a slowdown in the global financial sector. This may seem counterintuitive, as lower interest rates are generally favorable for the markets and can stimulate loans and investments.

However, a decision not to raise interest rates or to cut them unexpectedly could signal to investors that the Federal Reserve (Fed) is concerned about the state of the economy and may expect a slowdown, prompting investors to sell off their investments, leading to a slowdown in the crypto market and the delay of the next bull cycle for Bitcoin.

Important turning point for Bitcoin

QCP Capital sees the next FOMC meeting as a critical point for the markets that could significantly affect the price action of the cryptocurrency industry and the Nasdaq index, which tracks technology companies.

According to the trading firm, the recent rise in Bitcoin’s price has been partly due to the large injection of liquidity into the markets by the Federal Reserve, which has helped boost prices. However, the firm believes the “lack of resolve” among Fed policymakers is an even more important factor driving the current rally.

Suppose the Federal Reserve were to adjust monetary policy to align with market expectations. If so, it could result in more gains in stocks and the cryptocurrency market, allowing Bitcoin to continue its uptrend and surpass the $30,000 mark, which would significantly confirm the bull market cycle.

Weekly breakout confirmed for BTC

According to Adrian Zdunczyk, a technical cryptoanalyst, Bitcoin has signaled a bullish long-term pattern, confirming a weekly breakout for the most prominent cryptocurrency in the market, suggesting that Bitcoin’s price is likely to continue to rise in the long term.

This trend could allow BTC to regain the 200-day moving average, used to predict long-term trends, which has preceded strong rallies for the crypto from the low cycle.

According to Zdunczyk, recovery of the 50-week and 200-week moving averages may suggest that the current trend is a strong bullish signal, indicating a high probability of further price increases in the near future. Breaking through these resistance levels suggests that bulls have taken control of the market, boosting Bitcoin’s price, potentially up to the $30,000 mark.

For the analyst, Bitcoin’s price will create a range between $25,800 and $28,700, based on the average volatility of the crypto price movement. This suggests that the price is likely to stay within this range based on historical patterns. Any “violent” break outside this price range could result in a trend reversal or continuation, according to Adrian Zdunczyk.

As Bitcoin nears the $30,000 level, the upcoming FOMC meeting could increase volatility in the market. However, the new bull trend looks to be confirmed after an 82% rally from the cycle low, surpassing the next resistance level. This could represent the end of crypto winter, despite the possibility of future BTC price corrections.

Bitcoin is trading at $28,200, and has gained 1.8% in the last 24 hours.

Feature image from Unsplash, chart from TradingView.com