Bitcoin has retreated below the $72,000 level following its rise over the past week. As of March 18, Bitcoin price is trading at $72,141, recording a one-day decline of 1.27 percent. In the last 4 hours, the price opened at $ 72,916 and dropped to $ 71,978. This movement caused the days-long rise to be erased in a short time, and the RSI indicator fell to the level of 43.86. Such a sharp loss of momentum is the first to be seen since the recent correction in February that pushed the price below $70,000.
Critical Levels in Technical Indicators
It is seen that the 50-period moving average level followed for Bitcoin is located at $ 71,767. While the price is quickly approaching this level, whether or not it breaks will determine whether the current decline will be a limited correction or a broader pullback. Investors are focused on whether the price can maintain this zone.
Fed Meeting and Its Effects on the Bitcoin Market
The US Federal Reserve is expected to keep interest rates constant at its meeting this week. Markets regard this expectation as almost certain. Although on the surface this decision seems neutral, short-term movements in Bitcoin have been observed in past FOMC meetings. Volatility may increase because investors generally reduce their risk positions before the announcements and take positions again after the decision.
This week specifically, Bitcoin; It has gained value repeatedly over the past eight days, rising from $69,200 to $75,800. Such an upward momentum is seen in periods when expectations and optimism in the markets intensify. However, when macroeconomic developments approach, especially before the Fed’s decisions, this optimism can be tested with short-term fluctuations.
The Fed is not expected to signal a rate cut in the near term. Only one 25 basis point cut is priced in the futures market at the end of the year. In addition, inflation in the USA is still above the target and high energy prices do not provide the necessary conditions for interest rates to remain low. This leads to a weakening of the expectation of “loose financing conditions”, which play an important role in supporting long-term rallies in Bitcoin.
Latest Situation in the Market and Possible Scenarios
From a technical perspective, holding on to the moving average at $71,767 is seen as an important threshold. If the price recovers from this point and rises above $73,000 again, interpretations that the selling pressure is temporary may strengthen. However, if this level is broken down and the trading volume increases, the psychological support of $ 70,000 may become the next target.
The Fed’s decision and statements will be announced later in the day. In this process, most investors expect to wait until clarity is achieved and the price will move slightly more horizontally or downwards. Contrary to expectations, if a “dovish” tone message comes from the Fed, this is considered the only factor that can quickly reverse Bitcoin’s current decline. Unless such a development occurs, it seems likely that uncertainty and pressure in the market will continue for a while.
