The Bitcoin price is in a tight range as investors wait for the upcoming Federal Reserve decision on Wednesday. The BTC coin is trading at $62,915, which is a few points below its all-time high of more than $66,000. At the same time, the Bitcoin fear and greed index has risen to the extreme greed zone of 76. The CNN Money fear and greed index has also jumped to the extreme greed level of 78.
Bitcoin and Fed decision
Many analysts believe that the Federal Reserve has played an important role in boosting the price of cryptocurrencies and growth stocks. In its response to the Covid-19 pandemic, the Fed slashed interest rates to a record low of between 0% and 0.25%. The central bank also decided to print trillions of dollars through its quantitative easing (QE) program.
Now, the biggest question among Bitcoin traders is whether risky assets will continue doing well when the Federal Reserve starts unwinding its monetary policy. As such, they will be looking at several things in this meeting, including the bank’s dot plot. The dot plot is a paper where Fed officials note when they expect trends in interest rate to change.
Some analysts believe that the Bitcoin price will hold steady when the Fed starts to unwind its policy. They point to the fact that this process will be gradual and take several years to materialize. The most the Fed will hike interest rates when it will start the hiking cycle will be about 0.25%. Besides, the market has already priced in that tightening is coming.
Bitcoin price prediction
The daily chart shows that the Bitcoin price attempted to break out on Tuesday but the gains became limited. Today, the price remains above the ascending trendline that is shown in black. It has also moved above the 25-day and 50-day moving averages. The coin is also above the key support level at $53,000. It also seems to be forming a bullish pennant pattern.
Therefore, the BTC price will likely have a bullish breakout as investors target the next key resistance at about $70,000. This view will be invalidated if the price moves below $53,000.