FOMC Convenes, Signaling a Decrease in Bitcoin’s ‘Danger Zone’ – 5 Key Insights for the Week

Bitcoin (BTC) is beginning the week in recovery mode following a highly volatile weekend that resulted in significant losses. The price of BTC is struggling to regain its old all-time highs after facing sustained selling pressure. Traders are eagerly awaiting cues from the United States Federal Reserve, as both crypto and risk assets are impacted by the ongoing battle against inflation. The current trading conditions are unpredictable, and BTC/USD must reclaim a critical zone for price discovery to continue. As Bitcoin approaches its next block subsidy halving in a month, it may experience a classic pre-halving retracement. This article provides a comprehensive analysis of these issues and their potential impact on BTC price action in the coming days. Despite the recent setback, Bitcoin managed to achieve its second-highest weekly close ever. Liquidity flush and funding reset occurred in the market, resulting in a reset in open interest and funding rates. Bitcoin miners are expected to enjoy their final month of 6.25 BTC block subsidies before the halving in April. The debate on how this event will impact BTC price behavior continues, with some suggesting that Bitcoin may reach a new all-time high before the halving. However, it is likely to follow the classic pattern of lower prices followed by higher prices. The focus now shifts to the Federal Reserve’s next decision on interest rates and the accompanying commentary from Chair Jerome Powell. The outcome of the Federal Open Market Committee (FOMC) meeting on March 20 will have a significant impact on risk assets. Market observers will closely analyze Powell’s language for insights into future policy moves. Despite extreme greed in market sentiment, some long-term holders of BTC are taking profits and selling their coins. This trend may be attributed to the Grayscale Bitcoin Trust and Bitcoin miners. It is important to note that this article does not provide investment advice, and readers should conduct their own research before making any investment decisions.