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In a period where the frenzy of the Bitcoin ETF has taken hold of the cryptocurrency market, the price of Bitcoin (BTC) continues to remain relatively weak. However, analysts predict that the show of strength around certain price levels could indicate the cryptocurrency’s underlying recovery power.
Analyst’s BTC Analysis!
As Bitcoin continues to stay below the $26,000 level for the past 30 days, the cryptocurrency may lack support below the $25,400 level. In this context, Bloomberg’s senior macro strategist, Mike McGlone, stated that for Bitcoin to return to its upward paths, the momentum metric currently pointing downwards needs to undergo a strong reversal trend. In his analysis, the analyst stated:
Our bias is to respect the trend until proven otherwise.
McGlone explained that Bitcoin staying above the 100-week mark implies a slightly higher value than $30,000 and demonstrates its recovery power. Due to the recent court decision accepting Grayscale’s Bitcoin Trust conversion to a spot Bitcoin ETF, the BTC price saw a sharp increase on August 29, 2023. However, this situation was short-lived after the SEC‘s decision to delay. Companies like Blackrock, Bitwise, and Fidelity have been applying for Bitcoin ETFs.
The Impact of the Fed on Bitcoin Price!
In the near term, the Bitcoin price may witness volatility around the Federal Open Market Committee (FOMC) meeting scheduled for September 19-20, 2023. According to the CME FedWatch Tool, investors predict a 93% chance of the Federal Reserve continuing its rate hike. The current target rate is 525-550 bps.
Based on the recent FOMC meetings and the surrounding BTC price movements, there may not be much fluctuation if the Fed officials announce their decision to refrain from interest rate hikes. However, investors will be waiting for Fed Chairman Jerome Powell’s comments on future meetings and predictions. The analyst also noted that it is natural for BTC, which emerged during a period of unprecedented zero and negative interest rates, to experience some retracement as rates increase.
