Bitcoin traders see $63K sweep with FOMC, BTC price monthly close next
2024.07.31 12:27
Bitcoin (BTC) saw volatility at the July 31 Wall Street open as markets braced for United States macro events and the monthly close.
BTC/USD 1-hour chart. Source: TradingView
Bitcoin wobbles ahead of Fed’s Powell
Data from Cointelegraph Markets Pro and TradingView showed daily highs of $66,814 on Bitstamp ahead of the Federal Reserve’s decision on interest rate changes.
Markets do not expect the Federal Open Market Committee (FOMC) to alter rates until September, data from CME Group’s FedWatch Tool confirms, but it is subsequent commentary from Fed Chair Jerome Powell on traders’ radar.
“We anticipate increased volatility ahead of tonight’s FOMC. We do not expect a cut and place higher importance on the statement and Powell’s presser after,” trading firm QCP Capital wrote in its latest bulletin to Telegram channel subscribers.
“Our base case is for 1 cut in September and December each. We remain wary of a deviation from current expectations, which would trigger risk-off moves across all assets, including crypto. Such a scenario would indicate the Federal Reserve’s perception of heightened economic challenges.”
Fed target rate probabilities. Source: CME Group
Other macro data on the day emphasized the chance of that scenario playing out. In Europe, eurozone inflation quickened to 2.6%, beyond expectations of 2.5%.
“Core inflation in Europe hit 2.9%, above expectations of 2.8%,” trading resource The Kobeissi Letter wrote in part of a reaction on X.
“Inflation is back on the rise in Europe.”
As Cointelegraph reported, major tech stocks continue to come under pressure as a week of earnings reports fails to lift the mood.
Moving average becomes key BTC price support
Turning to Bitcoin itself, Keith Alan, co-founder of trading resource Material Indicators, was firmly in “wait and see” mode ahead of the Fed and monthly candle close.
Related: BTC price lower highs keep Bitcoin bears in control at $70K
“Whatever the case, it’s safe to say that we have a recipe for volatility through the Monthly candle close/open,” part of X analysis summarized on July 30.
BTC/USD 1-week chart with 21SMA. Source: TradingView
Alan highlighted the 21-week simple moving average (SMA) at $65,700 as the key level to hold in the event of downside volatility.
“Losing the 21-Week MA would open the door to fill some CME Gaps, but at the moment we do have some bid support laddered in the $63k – $65k range,” he wrote, referring to “gaps” between open and closing prices on CME Group’s Bitcoin futures market.
“Needless to say, the market is waiting for Powell to drop some hints and the Monthly close.”
BTC liquidation heatmap (screenshot). Source: CoinGlass
Data from monitoring resource CoinGlass showed order book buy liquidity increasing around $65,500 at the time of writing.
“I was expecting Bitcoin to provide us with a bit more of a bounce yesterday, but ultimately I’m still looking for that 63k range low to get swept,” popular trader Mark Cullen continued, hoping for a liquidity sweep through a key long BTC cluster.
“Currently BTC is sitting at the median of the range, but I’m expecting more volatility today with the FOMC rate decision looming.”
BTC/USDT chart. Source: Mark Cullen/X
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
