- September 21, 2023
- Posted by: [email protected]
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As the crypto world eagerly awaited the Federal Open Market Committee’s (FOMC) latest interest rate decision and accompanying press conference, Bitcoin enthusiasts found themselves on the edge of their seats, predicting spicy price fluctuations in the cryptocurrency’s value.
Leading up to September 20, Bitcoin stood strong at the $27,000 mark, marking a pivotal date in the cryptocurrency trading week. The crypto market demonstrated unwavering confidence in the forthcoming announcement by the United States Federal Reserve regarding interest rates.
According to CME Group’s FedWatch Tool, the consensus among market analysts was nearly unanimous, with a 99% probability that the Fed would maintain current interest rate levels. Financial commentator Tedtalksmacro noted, “The market is pricing a 99% probability that the Fed is on hold at this meeting. And the data is conducive to the fact that core CPI inflation is now running at the Fed’s target on a 3-month annualized basis.”
Despite this consensus, there was an underlying expectation of short-term volatility in the Bitcoin market. A closer examination of the BTC/USD order book on Binance, the world’s largest crypto exchange, revealed thin liquidity around the spot price. Material Indicators, a monitoring resource, highlighted this liquidity imbalance, stating, “If one thing in particular stands out, it’s that liquidity is thinly distributed through the range. We could see some walls go up, but for now it appears the order book is set to accommodate more volatility.”
Material Indicators also suggested that the subsequent remarks and press conference by Fed Chair Jerome Powell could trigger “spicy” price action in Bitcoin. Analyzing the order book further, they identified bid-side liquidity at $26,650, with substantial bids remaining at $25,000. On the flip side, sellers were prepared at $27,450, which had previously marked the local BTC price high in September.
Market sentiment among traders was mixed, with some anticipating the breaking of key support levels due to the FOMC’s announcement. Popular trader Daan Crypto Trades noted, “Good chance we take out some stops today during the volatility.” Fellow trader Jelle predicted “choppy waters” for Bitcoin, and trader Skew foresaw an active trading environment during the FOMC event.
Crypto Tony emphasized the importance of the $26,800 support zone for Bitcoin bulls. He stressed, “This is what I am looking for to remain in my long position. Must hold above the $26,800 support zone, or we risk creating a deviation,” underscoring the significance of this price level for Bitcoin’s near-term stability.
The cryptocurrency community braced itself for a potentially tumultuous ride as the FOMC’s decision loomed large. Despite expectations of a stable interest rate policy, thin liquidity levels and the looming specter of short-term volatility kept Bitcoin traders alert, ready to respond to the twists and turns of this highly anticipated event.
