Bitcoin (BTC) was volatile at the Wall Street open on July 31 as the market looked ahead to U.S. macro events and the monthly close.
Bitcoin falters ahead of Fed Powell meeting
According to data from Cointelegraph Markets Pro and TradingView, the daily high on Bitstamp was $66,814 ahead of the Federal Reserve’s decision to change interest rates.
According to CME Group’s FedWatch tool, the market expects the Federal Open Market Committee (FOMC) to keep interest rates unchanged until September, but traders are keeping an eye on comments from Federal Reserve Chair Jerome Powell after that.
“We expect volatility to increase ahead of the FOMC meeting tonight. We do not expect a rate cut and place greater emphasis on the statement and Powell’s subsequent press conference,” trading firm QCP Capital wrote in a recent announcement to subscribers to its Telegram channel.
“Our baseline scenario calls for one cut each in September and December. We remain wary of any deviation from our current expectations, which would trigger risk aversion across all assets, including cryptocurrencies. This scenario would signal the Fed’s recognition of heightened economic challenges.”
Other macroeconomic data that day underscored the likelihood of that scenario coming true. In Europe, euro zone inflation soared to 2.6%, beating expectations of 2.5%.
“European core inflation hit 2.9%, beating expectations of 2.8%,” trading resource The Kobeissi Letter wrote in a response to X.
“Inflation is rising again in Europe.”
As Cointelegraph reported, major technology stocks continued to be under pressure this week after their earnings reports failed to lift sentiment.
Moving averages become key support levels for BTC price
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 the monthly candle close.
Related: Bitcoin Bears Maintain Control at $70,000 as BTC Price Drops
“In any case, it’s safe to say that there’s a recipe for volatility with monthly candlestick closes/opens,” part of X’s analysis summarized on July 30.
Allen highlighted the 21-week simple moving average (SMA) at $65,700 as a key level to hold in case of downside volatility.
“A loss of the 21-week MA would open the door for some CME gap filling, but for now, there is some bid support in the $63,000-$65,000 range,” he wrote, referring to a “gap” between the open and close on CME Group’s bitcoin futures market.
“Needless to say, the market is waiting for Powell to drop some hints and for the monthly close.”
According to data from monitoring resource CoinGlass, order book buy liquidity is growing by around $65,500 as of this writing.
Popular trader Mark Cullen said, “I was expecting Bitcoin to bounce a little bit more yesterday, but ultimately I see it getting wiped out of the 63k range,” adding that he was looking forward to a liquidity sweep through the major long BTC clusters.
“Currently BTC is in the middle of its range, but I expect more volatility today as the FOMC rate decision approaches.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.