Bitcoin (BTC) experienced a notable price decline, falling below the $88,000 mark as the weekly close approached on Sunday. Traders were closely monitoring the market's reaction ahead of a significant upcoming US macroeconomic event.
Key observations indicated a snap volatility in Bitcoin's price, with BTC dipping close to the $87,000 level. Market participants anticipated weaker price action for Bitcoin leading up to the Federal Reserve's interest-rate decision. Analysts suggested that bulls needed to maintain support at the $86,000 level.
BTC Price Volatility as Weekly Candle Completes
Data from Cointelegraph Markets Pro and TradingView illustrated a resurgence in BTC price volatility. The BTC/USD pair shed $2,000 over a two-hour period, marking an end to a relatively uneventful weekend. This movement opened the possibility for a new "gap" to form on CME Group's Bitcoin futures markets. As previously reported, price action tends to fill such gaps promptly once the new macro trading week commences.
Trader Killa commented on X, noting that CME gaps have been consistently filled over the past six months. In a separate post, Killa elaborated on the significance of Mondays in shaping weekly price action, explaining that pivot highs and lows often form on this day, with weekend price action serving as a deciding factor.
If the weekend doesn’t pump, it increases the probability of a pivot low forming on Monday. If we do get a weekend pump, it increases the chances of Monday forming a pivot high.
FOMC Bets and Focus on Fed Rate Cuts
Market participants' attention was largely directed towards the week's primary macroeconomic focus: the US Federal Reserve's upcoming decision on interest rates. Data from CME Group's FedWatch Tool confirmed that markets largely anticipated a 0.25% rate cut from the Federal Open Market Committee (FOMC) meeting scheduled for Wednesday.
Private investment manager Peter Tarr highlighted the FOMC meeting as the week's top event, stating that liquidity, risk appetite, and positioning were all dependent on its outcome. He also mentioned the delayed JOLTS report as another data point to watch.
Most expect a 25 bps cut.
Bitcoin has historically experienced downward pressure leading up to FOMC announcements, often followed by significant volatility as markets analyze Fed officials' statements for indications of future policy direction.
Crypto trader, analyst, and entrepreneur Michaël van de Poppe suggested that FOMC nerves could lead to a temporary retreat to $87,000. He further posited that following this, a swift bounce back would confirm Bitcoin's uptrend, paving the way for a potential break above $92,000 and a run towards $100,000 within the next one to two weeks. This outlook was based on the Fed's anticipated reduction in Quantitative Tightening (QT), rate cuts, and expansion of the money supply to stimulate the business cycle.
Van de Poppe identified $86,000 as a critical support level for bulls.
