Bitcoin (BTC/USD) is trading at $20,390, which is a clear price drop since rising above $21,000 at the end of last month. There is no doubt that BTC remains resilient against a less confident macro outlook. The cryptocurrency has strongly defended $19,500, which has acted as an important psychological level. As a result, as long as this level is maintained, the technical outlook for BTC remains bullish. But investors may need to exercise caution this week.
The Federal Reserve interest rate decision remains the focal point this week. We already know that inflation is running higher than expected. With that in mind, when the Fed issues a statement, investors have taken a 75-basis point rate hike. Expectations have raised caution in all markets, which is to blame for the BTC bearishness. A rate hike following an aggressive Fed statement could stir the market and cause prices to fall further.
In contrast, over the past week, expectations have been mixed that the Fed may settle for a softer stance. With fears of a rising recession, analysts speculated that the Fed would move at a slower pace. For this reason, BTC has seen some recovery above $21,000.
As the Fed nears its policy decision, mixed expectations may not bode well for Bitcoin. This price is captured in the reaction, which has remained stagnant even though it remains stable.
Bitcoin stalls ahead of FOMC decision
Source – TradingView
On the daily chart, bitcoin faced a minor resistance at $21,000. Momentum is weakening, but MACD indicator remains in a bullish zone.
The 20-day moving average crossed the 50-day moving average, indicating that BTC is on the rise. Both moving averages support the cryptocurrency below.
Should you buy BTC?
Technical indicators and the $19,500 support give an optimistic view on the BTC price. However, in general, sentiment around cryptocurrencies is mixed. Investors are turning to the Fed’s statement to assess the bullish outlook.
A dovish Fed could be the trigger to move BTC higher. Similarly, the cryptocurrency could return to $19,500 at the hawkish Fed. Investors should be patient for now and judge the price of BTC based on the Fed’s decision.
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