bitcoin [BTC] Traders have found themselves in a distressing situation this week after a decline over the past seven days. The bearish performance caused BTC to crash, with the cryptocurrency king in a key area of short-term support at press time. From that point on, its direction is at the mercy of the FOMC meeting.
At press time, Bitcoin found short-term support at $19,004. However, according to the results of the FOMC meeting, its performance in the next 24 hours will change dramatically. The latter is expected to make a Fed funds rate adjustment in the U.S. that will affect investor sentiment as it has in the past.
Current forecasts lean towards growth of 0.5% or 0.75%. The latter will trigger stronger BTC bullish sentiment, while the former will support a range-bound performance.This is based on chart It provides guidance or assesses potential outcomes based on federal interest rate data.
Source: Twitter
Although the current sentiment is very supportive of a rate of 0.5% to 0.75%, a 1% hike is still possible. A rate of 1% is expected to spark bearish sentiment. However, the resulting downside could push BTC towards the $17,600 price range.
Additionally, on-chain metrics underscore the uncertainty as investors await a key FOMC decision. Dormancy indicators indicate that dormancy has decreased significantly over the past 30 days. At press time, it was near a monthly low, which is not surprising as investors are waiting to see how the market will react.
Source: Glassnode
Dormancy reflects whale activity, especially from the middle of the month. Addresses holding more than 1,000 BTC dropped significantly from September 15th. However, outflows from these addresses have also gradually decreased since September 18. This result reflects the uncertainty of the FOMC meeting and the impact of the announcement of interest rates.
Source: Glassnode
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The likely outcome could be another sharp rise or one of a small drop. Addresses already on sale are the most likely to take advantage and start accumulating, especially if there are additional headwinds. This result may provide a softer landing, so the downside is limited.
On the other hand, a favorable FOMC result could trigger a strong buy signal, especially for whales. Such an outcome could support a strong recovery this weekend.
So the outcome of the FOMC meeting will provide a rough idea of how well the Fed is doing in fighting inflation. A positive outcome could ease the selling pressure on Bitcoin and riskier asset classes in general.
