All financial eyes today will be on the highly anticipated US Federal Reserve FOMC meeting, as its conclusion will shed more light on the central bank’s monetary policy views.
Aside from the immediate impact on the financial markets after the interest rate decision is announced, investors will pay special attention to Fed Chair Kevin Warsh’s speech shortly after the meeting.
BTC to Dump?
The primary cryptocurrency tends to move quite sporadically in the days and hours leading up to the latest FOMC meetings. The past 24 hours have been rather positive for the asset, as it climbed from under $79,500 to $81,700 before it was stopped. Ali Martinez commented on this price uptick and outlined a bearish scenario for bitcoin once the meeting concludes.
“In the FOMC meetings I’ve tracked, Bitcoin’s first-hour move has often been less than 1%. A clearer direction tends to emerge over the next 24 hours and has often persisted a week later.”
He added that this history makes today’s price movement even more important, but warned that the current on-chain signals give him “reason to be cautious.” First, he noted that BTC whales have realized over $150 million in profits in just a few days. Their holdings have declined by more than 8,160 BTC in 24 hours, which is equivalent to $664 million.
“That decline suggests large holders are reducing exposure ahead of the decision.”
The Coinbase Premium Index remains in negative territory, hitting a monthly low at -0.17. This signals that US investors remain on the sidelines or are actually in a sell mode. Martinez warned that bitcoin now trades above the key $81,000 support, where almost a million units previously changed hands. If it breaks decisively to the downside, he expects a drop to $77,000 or perhaps even $67,000.
To invalidate this bearish thesis, the cryptocurrency would have to break past $84,500, where 620,000 units traded. If it does, then the door toward $92,000 and $104,000 opens wide.
No Rate Changes?
The FOMC meeting is one of the most notable macro events of the week, with experts anticipating no interest rate changes. Although the CPI and PPI data from earlier this month showed inflation is still very persistent and above the Fed’s 2% target, markets are reportedly “bracing for a Fed pause” after last month’s first hike in over three years.
However, Kevin Warsh’s post-FOMC speech could be even more important for BTC’s price. While experts believe there will be no hike now, they warned that the Fed could hike rates once again in December.
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