The Bitcoin market has recently experienced a steep drop, with its price flirting dangerously close to the $28,000 mark. The drop from $30,000 has already sent shockwaves through the market, raising fears of a massive correction. As the Federal Open Market Committee (FOMC) meeting approaches, investors are holding their breath, waiting to see how the Fed’s decision will affect the already volatile cryptocurrency market.
Upcoming FOMC Meeting Should Shake BTC Price
The US Federal Reserve is expected to raise interest rates by 25 basis points, reaching a range of 5% to 5.25%, the highest level seen since 2007. The crucial FOMC meeting is scheduled for May 2-3, with Fed Chairman Powell expected to make the announcement on May 3.
Earlier this week, Asian markets saw a potential trigger for volatility when the US government sold First Republic Bank to JPMorgan Chase. Concerns over the legitimacy of the transaction led First Republic to become the second largest bank failure in US history.
Unlike its response to the onset of the banking crisis in March, Bitcoin has shown minimal interest in emulating this situation. Instead, it continued its downward trend, despite warning signals that another financial institution may already be facing difficulties.
Many analysts are predicting a short-lived upward correction in Bitcoin price ahead of the meeting, followed by a sharp decline the day after the interest rate announcement. This decline should result from the stronger US dollar. With Bitcoin investors and traders on high alert, the upcoming FOMC meeting is sure to be an exciting event.
Expert describes the next step for BTC Price
The extended bearish candle on the Bitcoin price chart indicates that sellers are vigorously defending the $30,000 resistance level. Although the price has fallen dramatically, a small silver lining is that the buyers are tenaciously holding the $28,000 support level. This implies that the price of Bitcoin could fluctuate between $27.5,000 and $30,000 for some time.
Typically, a narrow range trading period is followed by a range expansion. If the price continues to decline and breaks below $28,000, the price may drop to the critical support at $26.5,000.
Conversely, if the range extends above $30,000, the price of BTC will likely climb to $31,000 and then to $32,200. A breakout above this level would signal an increase in momentum.
At the time of writing, the Bitcoin price is trading at $28.2,000, down more than 5% in the last 24 hours. A prominent crypto-analyst, Michael Van De Poppe, predicted that Bitcoin could undergo a correction at the FOMC meeting. According to him, Bitcoin could take support at $27.8,000 and then jump above its 38.6% Fib level at $29,000 after the FOMC meeting.