Bitcoin Traders Eye $63K Surge Ahead of FOMC Meeting and Monthly BTC Close

Bitcoin price volatility is picking up as key US macro indicators from the Federal Reserve approach. 

Source: koinvizyon.com

Traders are hoping Bitcoin will test lower liquidity within its range. On July 31, Bitcoin experienced volatility at the Wall Street open as markets prepared for upcoming US economic data and the monthly close.

Bitcoin Wobbles Ahead Of Fed Chair Powell's Announcement

Data showed daily highs of $66,814 on Bitstamp as markets await the Federal Reserve's decision on interest rates. While CME Group's FedWatch Tool indicates that the Federal Open Market Committee (FOMC) is unlikely to change rates until September, traders are closely watching Fed Chair Jerome Powell's comments. 

“We anticipate increased volatility ahead of tonight’s FOMC meeting. We do not expect a rate cut and are focusing more on the statement and Powell’s press conference.“, quote from trading firm QCP Capital noted in a recent bulletin to its Telegram channel subscribers. Additional macro data supports this outlook. In Europe, eurozone inflation rose to 2.6%, surpassing the expected 2.5%. Core inflation in Europe reached 2.9%, above the anticipated 2.8%, The Kobeissi Letter highlighted in a reaction on X. Meanwhile, major tech stocks remain under pressure as a week of earnings reports fails to improve market sentiment.

The Moving Average Is Emerging as a Crucial Support Level for Bitcoin’s Price

Keith Alan, co-founder of trading resource Material Indicators, emphasized a wait and see approach for Bitcoin ahead of the Fed's decision and the monthly candle close. Alan noted that the situation sets the stage for significant volatility during the monthly candle close/open. He pointed to the 21 week simple moving average (SMA) at $65,700 as a crucial support level if downside volatility occurs.

If the 21 Week MA is lost, it could trigger a move to fill some CME Gaps. However, we currently have bid support in the $63K- $65K range, Alan explained, referring to the gaps between open and closing prices on CME Group’s Bitcoin futures market. Data indicated increasing order book buy liquidity around $65,500 at the time. Popular trader Mark Cullen also weighed in with his note as, “I expected Bitcoin to bounce more yesterday, but I’m still anticipating a sweep of the $63K range low, looking for a liquidity sweep through a significantly long BTC cluster.”

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