Bitcoin price bulls are coming back stronger following a rejection from resistance at $27,200 earlier in the week. Investors are keenly watching to see whether BTC will settle above $27,000 and keep rallying to $31,000 or drop in search of more liquidity from the major support at $25,000 and if push comes to shove stretch the down leg to $22,000.
How Will Bitcoin React To The FOMC Meeting?
The crypto market is on the lookout for the outcome of the Federal Open Market Committee (FOMC) meeting on Wednesday amid concerns over possible ramifications for Bitcoin price and the rest of the crypto market.
Economists, according to Reuters expect the Federal Reserve to pause interest rate hikes for the second time this year while keeping the course open for future increases before the end of the year. The Federal Reserve benchmark interest rates currently range between 5.25% and 5.5%.
Remarks from past FOMC meetings showed that after the first pause in June, the Fed anticipated two more rate hikes to fight the persistent rise in inflation before the year ends. The first hike occurred in July with market watchers suggesting a skip over September before the regulator considers the second hike.
Bitcoin has continued to steady the uptrend since the release of the August Consumer Price Index (CPI) data, which showed inflation was slowing. However, price increases attributed to the rise in the cost of crude oil send mixed signals with most committee members seeing “significant upside risk to inflation.
Meanwhile, the weekly chart shows the Bitcoin fractal discussed earlier in the week playing out. Rejection from resistance at $27,200 resulted in a quick retracement below $27,000 but the upper range limit served as support, allowing BTC price to sweep through fresh liquidity and reclaim the $27,000 support.
The 200-weekly Exponential Moving Average (EMA) (purple) at $25,609 is a signal that Bitcoin’s market structure is improving. If bulls flip the 21-week EMA (red) and the 100-week EMA (blue) into support, a breakout to $31,000 could ensue before the next fractal pushes the price below the $30,000 level.
Key trend indicators such as the SuperTrend and the Money Flow Index (MFI) affirm the bullish grip. The former gauges market volatility while the MFI compares the volume of money flowing in and out of BTC markets.
As long as the SuperTrend is trailing Bitcoin price while providing support and the MFI upholds the uptrend toward the overbought region, the odds will be in favor of a larger uptrend.
Bitcoin Institutional Adoption On The Rise?
Interest among institutional investors has continued to grow despite the crypto winter resulting in multiple capitulations. Driving this interest is the push for a spot Bitcoin exchange-traded fund (ETF), which has attracted leading global firms like Blackrock, Fidelity Investments, and Franklin Templeton among others.
Santiment believes that the launch of an Adoption Fund for institutional investors by Nomura, Japan’s largest bank boosted Bitcoin’s ongoing price action above $27,000.
🏦 #Bitcoin received a boost to $27.2K after Japan’s largest investment bank, #Nomura, launched an Adoption Fund for institutional investors. This is the latest in #crypto‘s efforts to increase exposure for interested parties beyond traditional traders. https://t.co/ylDEDG9ehY pic.twitter.com/qDau3TzlEB
— Santiment (@santimentfeed) September 20, 2023
The increase in the number of institutions seeking exposure to Bitcoin is expected to have a long-term positive impact on the price. However, in the short-term, another insight from Santiment reveals that “whales have been dropping stablecoins” – a situation that could stifle the uptrend since “their buying power isn’t as strong as when Bitcoin was above $30k back in June.”
The stablecoin supply held by whales with a balance of more than $5 million now stands at the lowest level in the last six months. For a substantial upswing in Bitcoin price to play out, these whale addresses must increase the supply they hold.
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