The BTC/USD market has recently rallied quite nicely during the past couple of weeks, but now that we are consolidating, a lot of people will be looking at the possibility of whether or not the market will start to fall from here, or turnaround to take off to the upside and challenge the crucial $25,000 level. The $25,000 level is of course an area that a lot of people will have to pay close attention to, so therefore we need to be very cautious about the next move.
Keep in mind that the FOMC statement will have a lot to do with what happens next, so with that being the case, and of course, we also have to pay attention to the press conference, bitcoin will react to what the US dollar desk, and whether or not the Federal Reserve can convince people out there that it is in fact going to remain hawkish. Quite frankly, the markets have been ignoring the Fed for a while, so I think we’ve got a situation where sooner or later we will probably have to decide whether or not the Federal Reserve has any credibility whatsoever.
Pay Attention to the Federal Reserve
- If you pay attention to Wall Street, they believe that the Fed will turn around and start easing monetary policy rather quickly.
- On the other hand, if you listen to the Federal Reserve, they have given absolutely no reason for you to believe that they are suddenly going to be dovish, despite the fact that the rate of inflation is slowing down.
- In fact, I fully anticipate that Jerome Powell will do everything he can to convince the markets that he’s going to stay tight for longer.
The reason this matters for bitcoin is the fact that bitcoin has never really been challenged in this type of environment, so it’s not a huge surprise to think that perhaps we could roll over from here. Breaking down below the 200-Day EMA opens up the possibility of a drop to the $20,000 level, and then possibly even lower than that. On the other hand, if we were to turn around and see bitcoin break above the $25,000 level, we would not only see a huge bullish market here but more likely than not would see the US dollar get hammered against multiple assets, not just crypto.
Ready to trade Bitcoin in USD? We’ve shortlisted the best crypto brokers in the industry for you.