- Bitcoin price is currently indecisive with its direction as it hovers around an inclined trend line.
- A breakdown followed by a retest of $19,700 seems plausible due to the FOMC meeting.
- If the $21,000 hurdle is flipped into a support floor, investors can envision BTC tagging $22,106.
Bitcoin price struggles to establish directional bias as it tangles with a support level. The volatility seems to have dried and is holding out for the Federal Open Market Committee (FOMC) meeting, scheduled on November 2 at 06:00 GMT.
Bitcoin price and its outcomes for today’s FOMC
The FOMC meeting has three possible outcomes: the Fed will decide on the interest rate and its stance on the same going forward.
- The general consensus is a dovish posture with a less than 75 basis points (BPS) hike in interest rates. This decision will be bullish for the market and is likely to propel BTC higher.
- If the Fed agrees on 75 BPS, this could induce short-term volatility, but the sideways movement will likely continue.
- More than 75 BPS would be a bearish outlook and would indicate that the Fed is still hawkish and is on the path to tame inflation. This scenario has a greater chance of knocking BTC lower to retest immediate support levels.
Interest rate hike probability
Regardless of the Fed’s decision, traders need to be prepared for a spike in volatility and observe certain Bitcoin price levels closely.
BTC awaits volatility
Bitcoin price produced higher highs on October 26 and 29, while the Relative Strength Index (RSI) set up lower highs. This non-conformity, where the momentum indicator suggests a slowdown, often leads to a price reversal.
So far, Bitcoin price has dropped 2.8% and is currently grappling with the inclined trend line connecting the October 23 swing high and October 28 swing low. This indecision will likely be resolved with a spike in volatility during the FOMC meeting.
Assuming a breakdown of this trend line, traders need to pay close attention to the $19,700 support level and the inefficiency below it, extending up to $19,315. Investors looking to accumulate BTC can do so at these levels.
If the Fed flips its stance and turns dovish, there is a high chance sidelined buyers will step in, triggering a run-up. In such a case, BTC holders can ride this move from $19,315 to the upside inefficiency extending up to $22,106.
This expansive move in Bitcoin price would amount to 14% in gains and is likely where the short-term outlook for BTC is capped. The big crypto can retest the $25,000 psychological level in a highly bullish case.
BTC/USDT 1-day chart
While things are looking up for Bitcoin price, the above scenario is based on the assumption that the Fed will take a dovish stance. On the other hand, if there is a more than 75 bps hike, investors can expect BTC to slice through the downside inefficiency extending up to $19,315 and aim to sweep the June 18 swing lows at $17,593.
Such a development will, no doubt, invalidate the short-term bullish scenario, but a sweep of the said level could trigger a short-term relief rally for Bitcoin price. However, if bears continue their selling spree below $17,593, BTC could revisit the next stable support level at $15,550.
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