Bitcoin is currently flashing a fresh bullish signal, but short-term price cooling is underway. This comes as the asset pulls back from overbought levels, indicating that a correction might be due. However, the big focus for the market right now is the upcoming Fed meeting, which could impact the cryptocurrency market.
According to analyst Josh of Crypto World, pullback is not necessarily a bad thing. Overbought levels typically signal that an asset is due for a slight retreat before regaining momentum. In Bitcoin’s case, this cooling-off could set the stage for a more sustainable rally.
What to Expect Moving Forward
Bitcoin’s short-term charts show that the asset is maintaining a neutral position, bouncing between key support and resistance levels. A breakout above $61,000 could lead to a test of the $63,000 level, while a fall below $56,000 would signal more bearish movement. All eyes are now on the Fed’s decision and its potential to drive market direction.
The Fed’s Decision Looms Large
With the Federal Open Market Committee (FOMC) meeting only two days away, the market is on edge. The decision on interest rates is expected to be announced on September 18th, and this could cause volatility across both traditional and crypto markets. The futures market is currently pricing in a 67% chance of a 50 basis point rate cut and a 33% chance of a 25 basis point cut.
Given the uncertainty surrounding the Fed’s decision, Bitcoin is likely to trade in a more neutral range until the outcome is clear. However, once the decision is made, traders should brace for volatility. If the Fed delivers a 50 basis point cut, Bitcoin could see a strong upward move as the market adjusts to more favorable conditions. On the other hand, a 25 basis point cut might lead to a short-term bearish response.
