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Market Awaits FOMC Meeting as Bitcoin Faces Key Support Levels

The Federal Reserve is set to hold its Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday, where key inflation data will be released. While interest rates are expected to remain unchanged, market uncertainty surrounding the Fed’s future actions is causing risk assets like Bitcoin to experience volatility.

Confusing Employment Data Adds to Uncertainty

Recent jobs data has added to the economic confusion in the U.S. The Bureau of Labor Statistics reported the creation of 270,000 non-farm payroll jobs in May, yet the Household Survey indicated a loss of 408,000 jobs. This conflicting data has muddied the economic outlook.

Moreover, there is a tendency for initial positive job figures to be revised downward in subsequent weeks, leading to suspicions of manipulation to make the economic situation appear better than it is.

FOMC Meeting: Rates Expected to Hold Steady

As the FOMC meeting approaches, the market is almost certain that the Federal Reserve will keep interest rates unchanged. This expectation follows recent rate cuts by the Canadian and European central banks, which reduced rates by 25 basis points.

For risk assets like Bitcoin, the likelihood of prolonged higher interest rates is not favorable. Sustained high rates could limit the liquidity needed to fuel the next phase of the bull market. However, a rate cut may be inevitable later in the year due to the mounting debt burden and the potential need for increased currency printing to manage the debt.

Bitcoin Faces Rejection: Key Support Levels to Watch

Currently, Bitcoin is reacting to market uncertainty by pulling back from the top of its bull flag. The cryptocurrency is testing a support zone around $67,000, and there is potential for a bounce from this level.

Critical Weekly Close for Bitcoin

On the weekly chart, the $67,000 support level appears robust. If this support fails, Bitcoin might find support at $63,000 or the upward trend line around $64,000. However, the weekly stochastic RSI suggests a potential bearish crossover. The upcoming weekly close will be crucial in determining if this bearish signal is confirmed.

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Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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