Bitcoin (BTC) Price Action Hints at ‘Double-top’ Pattern Ahead of FOMC Meeting

Bitcoin (BTC) Price Action Hints at ‘Double-top’ Pattern Ahead of FOMC Meeting

Despite loads of volatility, Bitcoin is still trading above $20,000. Bitcoin recently had its highest weekly close since the middle of September. The buyers in the market are keen to bring a reversal. Still, there are warning signs in the market present.

Any new but significant events can change the direction of the current price action. One such event will be the FED's decision on interest rate hikes. Scheduled in the first week of November, this key event can shape the price of Bitcoin.

There are chances of bitcoin facing another jolt of volatility due to the month-end times. Yet, this month has been one of the most stable. Let's review some factors that might impact BTC/USD in the upcoming trading sessions.

Impending FED's Decision

The initial days of November can witness the Federal Open Market Committee (FOMC) meeting. While the last two meetings ended up with a hike of 0.75%, the question would be, 'will it this time too?'

Furthermore, word on the street about forthcoming interest rate hikes is less aggressive. They will be tending toward the neutral sentiment. For the crypto assets in general, this could start some growth as the conditions ease.

Moreover, according to the CME group's FedWatch tool, the probability of an interest rate hike lower than 75 bps is 19%.

The Double Top Pattern in Bitcoin

Bitcoin, on the daily timeframe, has been facing resistance at the 100-day moving average. Yet, the multi-week range has been going around in a tight range between $18,000 – $20,000.

There's been an observation of two spikes above $21,000 to be an obvious double-top pattern for Bitcoin.

Bitcoin Bottom Is Not Near

Cases providing comparisons of Bitcoin in 2022 with 2018 are abundant. The market is suffering from low volatility and is trading in a very narrow range. Yet, the chances of a complete bottoming are far from materializing soon.

Two important metrics are flagging the confirmation of an incoming downside. Yes, even further!

MVRV and UTXO Realized Cap — these are the metrics disregarding the bottoming out. Both these metrics have shown that the price of Bitcoin is in the value range. The Matrix suggested that Bitcoin at least half hold above $21,264 for at least 1-3 months to see a reversal. On the contrary, this price hold above $21,000 for mere hours, let alone weeks.

Buyer Interest Is Increasing

The illiquid supply of Bitcoin has been increasing. There has been an observation about the increase in buyer interest, which could create a supply price shock and increase in prices.

According to the data, 33.7% of all Bitcoin available in the wallet have left cold wallets. Data from the glassnode shows the probability of a supply shock is rising. The illiquid supply shock ratio metric has been rising throughout 2022 while nearing levels from the last halving cycle in 2017.

New-found Bullish Sentiment

The crypto fear and greed index sentiment has been at its highest for the past six weeks. This index uses benchmarks to determine the market's position, whether it is due for an upside or downside.

The recent index reading stands at 34/100, bringing it out of the extreme fear zone.

Moreover, from a tweet by Santiment, there has been information that long-term holders are fixating on holding Bitcoin despite the additional volatility in the market. With Bitcoin being over $20,700, the current sentiment in the market has proven that people are more satisfied with holding it while the supply on exchanges are hitting the lowest since the 2018 bear market.

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