The US FOMC Meeting plays a crucial role in setting U.S monetary policy through decisions on interest rates and liquidity measures. A bearish move that raises interest rates tends to strengthen the U.S dollar, makes the stocks and crypto assets like Bitcoin to fall aggressively. Conversely, hinting at rate cuts or pauses, a dovish tone generally weakens the dollar, boosting Bitcoin as traders seek higher-yielding assets.
As the FOMC Meeting comes nearby, investors seems to be more focused on data driven approach by the Fed. Generally, Bitcoin’s price has reacted strongly to FOMC announcements, with heightened volatility in the hours and days following the decisions. As markets await clarity, traders look to key levels for guidance.
On the 4h daily chart, BTC was seen trading around $103,000 – A key resistance level. A breakout here could signal a rally to $115,000, while strong support lay near $101,750, cushioning the downside. Moving averages revealed a bullish setup, with the 50-day moving average trending above the 200-day average.
On the daily chart, the MACD indicator flashed positive momentum, hinting at a bullish continuation. Still, traders are wary of a divergence that could signal weakening momentum. At the time of writing, Sentiment, as measured by the Fear & Greed Index, leaned optimistic. However, it remains vulnerable to hawkish surprises from the FOMC.
The FOMC’s decision will chart Bitcoin’s immediate course. A hawkish surprise could pressure Bitcoin, driving it below its key support, while a dovish pivot might propel it beyond the resistance. As of now, at the time of writing this article, BTC is being traded around $104,800 while it's price has seen a jump of 0.87% following this week and its market capitalization stands at #1 with $2.07 Trillion.