Bitcoin to dive lower in the wake of the FOMC meeting, says analyst

Key Takeaways:

• Michael Van de Poppe, the chief executive of Eight Global consulting, offered his take on the Federal Open Market Committee (FOMC) meeting.
• How will the FOMC decisions affect Bitcoin?

YEREVAN (CoinChapter.com) – In hindsight, the analyst, like many others in the crypto community, tuned into the FOMC meeting that took place on Jan 26 and was aggravated by the lack of certainty.

Mr. Van de Poppe asserted that Fed Chair Jerome Powell practically didn’t give any straight answers to the burning questions. Instead, the analyst called the speech “an hour of contradictions, lies and saying nothing.”

The CEO analyzed the said meeting’s influence on the Bitcoin (BTC) price action. In addition, he mentioned the runup in the hours preceding the event and a reversal afterward.

Also read: US Federal Reserve to end Quantitative Easing (QE) in March. Bitcoin (BTC) tanks.

The alpha crypto traded at $36,138 in the New York session on Jan 27.

FOMC meeting and Bitcoin

“Fear is still on the market,” said Mr. Van de Poppe when referring to Bitcoin’s short-term vector. He added that the sellers could take over, as people are “still very panicky” about the current market climate. In hindsight, Chair Powell confirmed that the tapering would start in March 2022, and the Bitcoin price reacted to the FUD.

Mr. Van de Poppe referred to Bitcoin’s 30 min chart, where he marked the beginning and the end of the meeting. As the chart above shows, BTC built up in the hours preceding the meeting. The asset then gave a choppy performance during the speech and finally cascaded down afterward.

Also read: Bitcoin price jumps 10% to regain $37K as BTC steps on the path to recovery.

Moreover, the analyst pointed out that the instrumental range for Bitcoin stood between $33,000 and $39,000, i.e., the core support and resistance of the recent price fluctuations. He added that a big impulse wave is not yet in sight, and it will “take some time” until the coin sees a consistent uptrend.

Possible short and long positions for Bitcoin

The CEO emphasized the importance of the $38,000 rejection, as it could take BTC lower in the sessions ahead. If that scenario plays out, the digital asset could find support at $34,000.

To finalize his analysis, Mr. Van de Poppe gave several market entry, and exit points that he felt could help the traders make the right move. He noted $37,500 as a key rejection as a sell signal and a possible retest at $34,000 as a profitable long call.

Also read: Tesla’s Bitcoin profits risk evaporating as BTC eyes run-down towards $30K

Bitcoin and the crypto market, in general, are dependent on the global economy, and the US fiscal policy in particular. Fed’s decision to hike the interest rates and the subsequent quantitative easing taper will affect the investors’ desire to engage in risk assets, such as Bitcoin.