The next couple of days could give us an idea as to where Bitcoin is going to end up, so a bit of patience could probably go a long way.
Bitcoin markets bounce a bit during the trading session on Wednesday as we are awaiting the FOMC statement. Most retail crypto traders have very little idea as to how much the Federal Reserve truly influences where Bitcoin goes, but at the end of the Wednesday session, we should have quite a bit more clarity as to what the monetary policy going forward for the Federal Reserve will be. This will in turn have a major influence on the US dollar, and by extension Bitcoin.
Keep in mind that the Federal Reserve not only has an interest rate decision, widely expected to be raising rates by 50 basis points, but it also has a statement and a press conference to get through. Once all of this is digested, traders will start to look try and figure out whether or not the Federal Reserve is going to remain as aggressive as they have priced into the markets or are going to leave some “wiggle room” for policy adjustment due to weaker than anticipated economic figures.
Bitcoin loves a loose Federal Reserve. If they suggest that the monetary policy will continue to be very flexible going forward, even though it may be more on the hawkish side, that might be enough to have Bitcoin and other risk assets start to take off. Quite frankly, the Federal Reserve does not care about Bitcoin, but it does have a bit of a knock-on effect as to what happens elsewhere. The $40,000 level above will be crucial to pay attention to, and a daily close above there could give buyers enough hope to start jumping in again. Keep in mind that the $37,500 level has been supportive as of late, and as long as we can stay above there we are in pretty good shape.
If we break down below $37,500, then the market is likely to go looking toward the $35,000 level. It is here where the “rubber meets the road”, meaning that we need to take a stand if Bitcoin is going to continue to be somewhat buoyant. If it breaks through that level, we are more likely than not going to see continued selling at that point. The next couple of days could give us an idea as to where Bitcoin is going to end up, so a bit of patience could probably go a long way.