With the Federal Reserve’s interest rate decision looming, Bitcoin’s price fell below $112,000, hitting a daily low of $111,350. It was anticipated to form a higher low and climb back to $116,000 from $112,000. However, as is customary with Fed-driven volatility, the expected outcome did not materialize. Experts are forecasting the potential market movements in this context.
Bitcoin (BTC) Analysis
Analysts noted that reasonable levels of volatility were expected due to the FOMC meeting, even before today’s decline accelerated. While maintaining a long-term position is a common strategy, reducing risk is considered a wise option. The $111,000 level is highlighted as significant for BTC.
“I anticipate a reasonable level of volatility as usual before the FOMC meeting. I will generally maintain my long-term position, but will follow a risk reduction strategy with perps. If BTC reaches the $111,000 level, I think purchases will be made, closing the CME gap. I still believe this situation is a dip buying opportunity.”
The topic of the CME gap has been a point of discussion throughout the week. A decline around $110,000 would eliminate this gap, and BTC was trading at $111,170 at the time of writing.
Ethereum (ETH) Outlook
Ethereum has witnessed positive, albeit modest, ETF flows for the last two days. While an agreement with China this week might support a positive sentiment, the lack of substantial appetite on the institutional side is a concern. There is no prevailing sentiment that Ether will reach record highs post an interest rate cut and a subsequent China agreement across both exchanges and ETF channels.
In contrast, U.S. stock markets are breaking records, with NVDA becoming the first company to surpass a $5 trillion valuation. As the stock market hits new highs, positive sentiment is expected to be bolstered by the earnings reports of trillion-dollar giants this week. The future trajectory for ETH remains to be seen.
Analysts remain hopeful, stating:
“A daily update on ETH. The same compression and momentum are still forming. Everything depends on the business cycle and the FOMC’s decisions. If this is a progressive development for risk assets, I think ETH is ready for a new ascent phase and to rise above $5,000.”