The Fed Decides This Week: What July 28-29 FOMC Means for Bitcoin's Key Range
Bitcoin has been in a rut for the past few weeks, moving between two numbers. This week, the Fed is left to pick the first to break.
The Fed will hold its July 28-29 meeting, with its decision on the interest rate coming out on Wednesday at 2:00 p.m. ET (18:00 GMT) under the leadership of Fed Chairman Kevin Warsh.
The rate has been in a 3.50%-to-3.75% range for months, and this is a non-SEP meeting, so there is no accompanying updated dot plot.
Looking at the range of probabilities from market activity based on CME FedWatch data, the prospects for a rate hike appear to be nearly 65 percent already before the meeting, and the timing of a potential rate increase is becoming more probable to be in September.
This is the starting point a vast majority of traders will be trading around.
Bitcoin's trading has been between $58,000 and $63,800 support and resistance levels for a significant portion of July, which have been mentioned in several market analysis pieces this month.
CoinGecko shows BTC is currently trading in the vicinity of the resistance at $64,490, as of July 28, approaching an important decision.
A hold is the probable result, but a hold is not necessarily bullish. The market had been expecting reductions earlier in the year, and with a pause continuing, it qualifies the higher-for-longer tone that's dampened risk assets since June.
The greater danger is in the tone of the press conference, not in the speed itself, than with Warsh.
Any hawkish stances or indications of a tightening up can cause Bitcoin to re-test the $58,000 region. A dovish tone or an unexpected softness could pave the way to the $66,600 to $67,600 resistance range that's capped rallies since spring.
In either case, this meeting will probably be a pivotal moment for crypto markets throughout August.
In what is notable, this is a non-SEP meeting, and so they don't have a fresh dot plot to analyze. So this time around, the post-meeting statement and Warsh's word choice are the primary signals that traders will need to trade with.
Not financial advice.
Which way do you think Bitcoin breaks after Wednesday's Fed decision, up through resistance or back down to support?
