Bitcoin prices were relatively flat ahead of the opening bell in New York on Tuesday as traders waited for Federal Reserve officials to meet for a two-day political meeting.
The flagship cryptocurrency fell 0.12 percent to $ 555.88.07 from 1330 GMT. At the start of the Asia-Pacific session, the price traded for just $ 53,221 after a mysterious $ 1 billion transfer to the Gemini exchange’s wallet panicked the market over a potentially massive sell-off.
Bitcoin also fell due in part to profit-taking after its price hit a new record high of over $ 61,000 over the weekend. The cryptocurrency’s downward movement coupled with the massive influx of twins was reminiscent of a similar price move after the price topped $ 58,000 in late February.
The Bitcoin Fractal
Back then, the BTC / USD exchange rate dropped as much as 26.30 percent to $ 43,016 before recovering to $ 60,000 in the later sessions. In addition, the pair received support from its simple 50-day moving average (the blue wave in the graph below) which maintained its broad bullish bias despite the massive dip.
The current price movement appeared to be similar. Bitcoin found short-term support at its 20-day exponential moving average (20-DMA) on Tuesday, suggesting that a break below the green wave could land its price near the 50-DMA.
Bitcoin is showing strong near its 20 DMA wave. Source: BTCUSD on TradingView.com
The 50 DMA wave is near $ 47,000. In general, it has served as a strong support buffer during Bitcoin’s uptrend since March 2020. Hence, it tends to act as a psychological rebound area should the price drop below $ 50,000 in the upcoming sessions.
Fed meeting
The prospect of lower bitcoin dumping depends on how the Federal Reserve meeting plays out through Wednesday. For the first time, central bank officials are meeting against a stronger economic backdrop: coronavirus cases are declining, vaccination rollouts are accelerating, and U.S. President Joe Biden’s $ 1.9 trillion stimulus plan is coming to Americans with one Up to $ 1,400 direct value near payments.
The markets have taken notice. The benchmark’s 10-year US Treasury note yield has soared to its highest level in more than a year, raising concerns about an early fiscal tightening by the Fed. The central bank has kept its policy rate near zero and has continued its monthly asset purchase program of $ 120 billion since March 2020.
Analysts expect no policy change, but remain convinced that the Fed will discuss its plans to reduce its expansionary policy against an improvement in the economic outlook. Hence, any sign of tightening by central bank officials could put Bitcoin under pressure.
The cryptocurrency has risen 1,500 percent against loose monetary conditions.
