The Federal Open Market Committee (FOMC), the policy-making board of the US Federal Reserve, announced in the meeting minutes released on Wednesday that it kept the federal funds interest rate constant between 3.5 and 3.75 percent. The bank stated that it maintains its target of maximum employment and 2 percent inflation in the long term. While it was emphasized that the developments in the Middle East created uncertainty in the markets, it was stated that the Fed, taking the risks into consideration, will continue to evaluate the situation flexibly.
Fed took decision in line with market expectations
Keeping interest rates constant was a development predicted by market actors. However, after this decision, the volatility in Bitcoin continued. Bitcoin price remained fragile during Fed Chairman Jerome Powell’s press conference. Shubh Varma, CEO of Hyblock company, described the price action as “the usual sell-on-news approach”. However, the Bitcoin price rose again to pre-decision levels within hours, indicating that investor confidence remained.
After the FOMC minutes were published, Bitcoin fell to an intraday low of $74,937. This level indicates below the 20-day moving average. Some traders see this technical indicator as the critical threshold for Bitcoin to move from support to resistance. Failure to close daily on the trend line can be interpreted as the upward trend losing momentum.
The market is volatile, resistances cannot be overcome in the short term
In recent weeks, the Bitcoin price has experienced major fluctuations in both the spot and futures markets. As Cointelegraph noted, after the price broke above the channel resistance, it was expected to hold in the $76,500-75,500 band for stronger support.
Glassnode analysts observed that Bitcoin investors increased their bearish positions ahead of the FOMC. Following the rise to $79,000 on Tuesday, an increase in open positions was detected. A clear divergence was noted in the transaction volume between spot and futures markets. It was noticed that funding rates remained neutral.
According to the Glassnode report, it is stated that Bitcoin found support in the $ 65,000-70,000 range, but had difficulty in creating a stable upward movement due to weak demand. Profit realization by short-term investors and net short positions opened in the futures market weakened the upward momentum.
Long-term support strengthens as global demand continues
Analysts state that the BTC price has created a significant accumulation in the $ 65,000-70,000 band, with both the entry of institutional investors into spot ETFs and the increase in open positions in the Chicago Mercantile Exchange (CME). While the weakening of momentum in the short term is noteworthy, it is stated that long-term investor interest has not decreased.
In the cryptocurrency market, in addition to the Fed’s interest rate policy, geopolitical risks and investor psychology also affect pricing. While the recent increase in volatility has attracted attention, especially the pressure on short-term moving averages and technical indicators indicates that Bitcoin may continue its volatile course for a while.
