FUNDAMENTAL OVERVIEW
Bitcoin has come under pressure yesterday as the odds
for the Clarity Act cloture vote to pass dwindled into the Senate event. Unfortunately,
the
vote did not pass and with a more divided Congress expected after the
midterms, comprehensive crypto market structure legislation is unlikely to
advance again this year. This setback weighed on Bitcoin, with the
cryptocurrency briefly falling below the key $75,500 support.
The focus will now
shift back to the macro story, with the FOMC decision today being a key catalyst.
The decision could trigger big moves, especially if we get deviations from the
expectations. The consensus is for the Fed to hike by 25 bps, with potentially
one or two dissenters voting for a hold. At this meeting, we get the Summary of
Economic Projections (SEP) and the Dot Plot.
Traders will be
focused on the latter where the Fed is expected to project two more rate hikes,
one in 2026 and one in 2027. This would still be below the current market
pricing of three more rate hikes by the end of 2027. Fed Chair Warsh is not
expected to offer much in terms of forward guidance but just repeat his Jackson Hole message.
If the Fed signals
three or more further hikes, that would likely be taken as a hawkish surprise
and weigh on Bitcoin. Conversely, a forecast suggesting just one or two more
rate hikes could be taken as dovish and could give Bitcoin a boost.
The other major
focus will be developments in the Middle East, as oil prices continue to trade
above $100 level and fuel inflation concerns amid worsening disruptions. Oil
prices have been the key driver of markets recently, so any de-escalation in
the Middle East could push oil prices lower and lead to a dovish repricing, which
could ultimately support Bitcoin.
For now, I think
the negative macro backdrop should continue to limit the upside and keep weighing
on Bitcoin. We would likely need a de-escalation in the Middle East or a dovish
Fed to change the picture and open the door for new highs.
BITCOIN TECHNICAL
ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can
see that Bitcoin probed
below the key 76,000 support and started to consolidate around it ahead of the
FOMC decision. We can expect the buyers to step in around these levels with a
defined risk below the support to position for a rally back into the 82,500 resistance.
The sellers, on the other hand, will likely pile in here with a defined risk
above the support to target a drop into the 67,000 support next.
BITCOIN TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have
a downward trendline defining the bearish structure. If we get a pullback into
the trendline, we can expect the sellers to lean on it with a defined risk
above it to position for a break below the support and new lows. The buyers, on
the other hand, will want to see the price breaking above the trendline to
increase the bullish bets into the resistance targeting a breakout.
BITCOIN TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s
not much we can add here as the price is consolidating around the support zone
as traders await the FOMC decision later today. From a risk management
perspective, it would be better to wait for the decision before committing to
new positions as the moves might be aggressive, especially in case of surprises.
UPCOMING CATALYSTS
Today, we have the FOMC rate decision. Tomorrow,
we get the US Jobless Claims figures. Traders will also keep a close eye on
developments in the Middle East.
This article was written by Giuseppe Dellamotta at investinglive.com.