The strengthening of the US Dollar on late Friday, made the Bitcoin prices tumble a Bit before the FOMC meeting on May 2.
Bitcoin declined more than 2% on Monday as the next FOMC meeting is approaching on 2-3 May. Meanwhile, the release of the U.S. Personal Consumption Expenditures (PCE) Index data, which was expected to be the macro event of the week, failed to offer a performance catalyst since the statistics generally corresponded to what markets had previously priced in.
Some experts believe the Fed will raise interest rates again, despite inflation cooling and the unemployment rate stable. As a result, the Fed may decide to suspend rate rises. Let's see what the experts take on this and how it will affect Bitcoin;'s price in the upcoming days.
As covered in the previous article, It has been observed that every time the FED raises interest rates, Bitcoin prices rise dramatically in that quarter. According to the most recent Consumer Price Index report, inflation grew by 0.1% from February to March, a lesser increase than in previous months. However, inflation remains high, at 5% year on year. Because we aren't quite at the Fed's 2% target range, another rate hike is possible, but it won't be as significant as last year's 50 to 75 basis point increases.
"I believe that the Fed will be raising rates by 25 bps at the May meeting. This will probably lead to banks adjusting rates higher from where we are today." - stated Lawrence Sprung, author of Financial Planning Made Personal and licenced financial planner.
As the market anticipates a pause in rate hikes at the June 14 meeting, any indication of a dovish stance from Fed Chair Jerome Powell in the post-FOMC press conference could be critical in setting the market mood for the next 45 days. However, further fluctuations in the Consumer Price Index (CPI) and employment data may dampen the prospects of a rate hike pause in the near future. Previously, CoinGape reported that Bitcoin price could face resistance at $31000, as opposed to the current price range of $29,243.
Bitcoin prices dropped drastically from 29,600 to 28,640. On the daily timeframe, Bitcoin has fallen below the 50-day exponential moving average, which was a key support level of around $30,000 at the time.
The formation of candles indicates that the negative bias is dominant in the market, and the RSI and MACD indicators are also in the sell zone, indicating the possibility of a Bitcoin price decline today.
On the downside, Bitcoin is anticipated to find immediate support near 28,000, which is stretched by a trendline shown on the daily timescale. A break below this 28,000 level has the ability to send BTC to the next support level of 27,195.
As only one day left for the FED meeting, the Bitcoin market experiencing a negative sentiment as FUD waves surround the market. The Technical indicators are right now pointing towards a "Sell" market which is due to the fact that short-term investors are getting away. This move will rectify the BTC holdings with long-term hodlers and will stabilize the current price movement.
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