Bitcoin quotes showed strong growth last week, rebounding from a one-month low by more than 15%. However, the price couldn’t consolidate above the important level of 60,000, and yesterday many bulls decided to lock in profits. In anticipation of the key events of the next few days, cryptocurrency market participants took a wait-and-see stance. Given the scale of the past growth wave, Bitcoin sellers may increase activity and continue the price correction closer to the 56,500 mark.
All investors' attention is focused on the Fed meeting that starts today. There are high expectations for the decision of the American regulator on monetary policy. Tomorrow's verdict on the level of interest rates is sure to cause a sharp rise in volatility, but the direction of price movement remains uncertain. In recent days, traders are increasingly active in predicting a decrease in the Fed rate by 0.5%, but this view isn’t shared by all market participants.
In particular, analysts of Barclays pay attention to today's economic statistics. In the U.S. will be presented data on retail sales and industrial production for August. According to the bank's experts, the actual dynamics of retail sales may significantly exceed the consensus forecast, which assumes a decline of 0.2%. In this regard, the representative of Barclays Skylar Montgomery Koning expects that the Fed will cut rates only by 0.25%. Such an outcome could greatly disappoint optimists in the cryptocurrency market.
Caroline Mauron of OrBit Markets notes the critical importance of the U.S. central bank’s decision for the Bitcoin price. The September meeting is even more important for investors than the election race for the U.S. presidency. At the same time, Mauron urges to keep an eye not only on the Fed's current move, but also on future forecasts. If Jerome Powell and his colleagues don’t stick to the clearly dovish stance, financial markets could experience a strong decline. Bitcoin, as one of the most volatile assets, risks being at the center of the sell-off.
The Stochastic indicator on the daily Bitcoin chart has turned downward and is signaling the beginning of the correction. The nearest target of the bears may be the level of 56,500.
The following trading strategy can be suggested:
Sell BTCUSD at the current price. Take profit — 56,500. Stop loss — 60,500.
This content is for informational purposes only and is not intended to be investing advice.
