Bitcoin Hovering Below $40,000 Ahead of Fed Meeting
Bitcoin continues its positive streak, rising for seven consecutive days since Wednesday.
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Bitcoin has taken an attempt to break $40,000 for the second time this week, with the Fed’s FOMC policy meeting acting as a source of uncertainty.
Bitcoin’s Positive Consolidation around FOMC Meeting
Markets are eyeing the Federal Reserve’s decision on the timeline for phasing out quantitative easing.
Bitcoin shrugged off the selling pressure after Amazon denied rumors that it would begin accepting crypto payments, holding above the 200-day moving average at $34,600.
A bigger threat looms with the Fed’s policy meeting beginning today, where U.S. central bank heads will decide on tapering asset purchases.
If the Fed continues its dovish approach in supporting the economy via a $120 million bond purchase and near-zero interest rates throughout 2022, BTC is likely to continue upwards.
However, a hawkish stance of the Fed will hurt the rising inflation narrative and potentially act as a negative catalyst for Bitcoin’s price.
In the Fed’s last meeting in mid-June, some hands went up for increasing the rates in late 2022, contrary to initial plans. The markets expect the Fed to maintain the status quo in delaying the purchase until 2023 as the threat of the COVID-19 Delta variant and supply-chain hurdles are negatively affecting the economy.
Technically, the leading cryptocurrency now faces resistance at $41,600 and the 50-day moving average at $44,500, with support at the yearly opening price of around $28,800. BTC was last trading at $39,640 after reaching a high of $40,900 before the U.S. market opening bell.
The S&P 500 index opened in the green this morning, up 6.4 points, holding the $4,400 benchmark. Gold dropped below $1,800 this morning while the DXY U.S. dollar index rose by 0.21%, signaling preparations for a hawkish Fed announcement.
The second-largest cryptocurrency, Ethereum, is also holding above support at $2,150. However, ETH is nearing a death cross between the 50 and 200-day moving average, which can be avoided if it holds above current levels.