While market participants are awaiting the results of the FOMC meeting and the financial reports of key tech stocks, Bitcoin has failed to break through its 50-day simple moving average.
Bitcoin ( BTC ) gave back some of its early gains around the opening of Wall Street on Wednesday, as the market was preparing for the interest rate decisions of the Federal Reserve of the United States.
Key points:
- After the upward fluctuations failed to continuously break through $81,687, Bitcoin fell by about 0.3% on Wednesday.
- As South Korea's KOSPI index rose by 6.6%, the U.S. stock market traded sideways ahead of the FOMC interest rate decision and press conference.
- BTC / USD Breaked below the 50-day simple moving average of $81,831, which constitutes a local resistance level.
TradingView data shows that BTC / USD failed to break through $81,700 and subsequently fell back to a low of $80,297 on Bitstamp. As of press time, the pair had declined by 0.3% for the day.
Before the statement from the Federal Open Market Committee ( FOMC ) and the press conference of Federal Reserve Chairman Kevin Warsh, the U.S. stock market opened flat. The market generally expected officials to maintain interest rates in the current range of 3.75% to 4%, with attention shifting to Warsh's wording and comments on the economy.
Data from FedWatch Tool indicates that the market believes there is a 90.6% probability that FOMC will remain unchanged on Wednesday, while the outcome of the December meeting still points to a 0.25% interest rate hike.
Material Indicators, co-founder, and trader at an encrypted trading platform, Keith Alan, commented that Walsh's stance could change the probability of a rate hike in December. Between the two meetings, traders will also need to digest the results of the U.S. mid-term elections on November 3rd.
He summarized on Tuesday, "The market may have already factored in unchanged interest rates, but not yet the election results."
The Nasdaq Composite Index, which is dominated by technology stocks, did not follow the rise of South Korea's KOSPI Composite Index. The latter closed up 6.6%, recording its best single-day performance since July.
Alan mentioned that although the index rebounded by nearly 10% within two days, it was still 34% lower than the record high of 9,115 points set on June 22. He also pointed out that by the close of Monday, the index was 40% below its peak.
Bitcoin's rise is suppressed by the 50-day moving average
After the upward momentum of Bitcoin weakened, the 50-day simple moving average at $81,831 served as a resistance level in the short term.
A comment with the ID Alan states: 'If the closing price falls below $80,565 within 4 hours, the probability of retesting the resistance of the 50-day moving average will decrease.'
When analyzing the liquidity of exchange order books, the on-chain analysis platform Glassnode pointed out that the liquidity of buy orders below $80,000 has further decreased, and if this downward trend accelerates, the potential reversal zone will also move lower accordingly.
In its latest weekly report, “The Week Onchain”, the institution stated: “There are only 3.4 million dollars of buying orders left around $80,000. The buying orders have moved down to the range of $78,000 to $79,000, where the total amount of orders is about 42 million dollars, which is higher than the approximately 24 million dollars in mid-October.”
"This is the largest buying zone closest to the current price, and it is also where we expect buyers to enter the market for the first time during a pullback."
