Bitcoin: The world of cryptocurrencies is always full of ups and downs, but Bitcoin once again caught the attention of its investors in the second week of September. The market was curious about whether Bitcoin would be able to cross the important resistance level of $115,000. Expectations of a rate cut by the US Federal Reserve had increased the heartbeat of the market, and investors seemed completely cautious.
The recently released US data paved the way for a gradual increase in the price of Bitcoin. While the focus in the previous weeks was on the weakness of the US labor market, now investors’ eyes are fixed on the inflation data. The results of the Public and Producer Price Index created enthusiasm for Bitcoin, and the increasing investment flows in Bitcoin ETFs further strengthened this rally.
Fed’s rate decision and impact on Bitcoin
The Federal Reserve’s interest rate decision on September 17 could prove to be decisive for Bitcoin and the crypto market. Most market analysts are expecting a 25 basis point cut, while some believe that this cut can be up to 50 basis points. Although the expectation of this cut is already included in the market, the comments of Fed Chairman Jerome Powell can create volatility in the market at this time.
The crypto market currently has moderate sentiment. Bitcoin’s performance remained limited as many investors are diverting their funds towards altcoins. During this period, Bitcoin showed a rise of 3.5% in the week, but the rest of the market capitalization except BTC and ETH increased by 6%. Bitcoin’s dominance level has come down to 57%, which is the lowest in the last one month.
Bitcoin’s technical situation
Bitcoin took support from the lower boundary of the downward channel in early September and is now challenging the level of $115,000. According to technical analysis, the level of $114,600 is an important support line for this uptrend. If Bitcoin maintains a daily close above this level, the potential for a move towards $120,000 and possibly $125,400 is strong.
The shorter-term exponential moving average (EMA) lines are also pointing upwards, further reinforcing the uptrend. However, the stochastic RSI on the daily chart is showing an overbought signal, a sign of caution. Still, the signal is above 80, which suggests that buying interest is still intact.
If the price rebounds, the mid-band level of the downward channel, which has been seen since July, will provide support at $111,600. A fall below this level will shift attention to the $108,000 area.
Macro Events and Market Direction
Bitcoin’s cautious rally is driven by expectations of upcoming events. The Fed’s clear stance on interest rate policy after the release of US CPI and PPI data will determine the market direction. Apart from this, risk aversion and external factors such as trade policies may also keep pressure.
Bitcoin will enter the week of the Fed’s rate decision close to the important resistance level of $115,000. If the Fed gives a clear signal for future rates after the cut, it will further strengthen Bitcoin’s uptrend. Conversely, if Powell adopts a cautious stance, the market may see increased negativity and selling pressure may build up. Bitcoin investors are cautious at the moment, but the market remains promising. Maintaining the support of $114,600 is the most important for this uptrend. If investors study the market patiently and take care of risk management, Bitcoin can reach the level of $120,000 and above.
Disclaimer: This article is written for informational purposes only. This should not be considered a recommendation or suggestion to buy, sell or invest in any asset. Cryptocurrencies and other financial investments are extremely risky, so any investment decision is the responsibility of the investor himself.
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