Bitcoin price bounce rejected at 50-day trend line ahead of FOMC, earnings

Bitcoin (BTC) gave back early gains around Wednesday’s Wall Street open as markets prepared for the US Federal Reserve’s interest-rate decision.

Key points:

• Bitcoin fell around 0.3% on Wednesday after upside volatility failed to sustain past $81,687.
• US stock markets tracked sideways into the run-up to the Federal Open Market Committee’s (FOMC) interest-rate decision and press conference after South Korea’s KOSPI gained 6.6%.
• BTC/USD stalled below its 50-day simple moving average at $81,831, which acted as local resistance.

US stocks tread water as focus turns to Fed chair Warsh

Data from TradingView showed BTC/USD failing to break beyond $81,700, instead reversing to as low as $80,297 on Bitstamp. At the time of writing, the pair was down 0.3% on the day.

US stocks opened flat ahead of the Federal Open Market Committee (FOMC) meeting statement and press conference from Fed chair Kevin Warsh. Markets overwhelmingly expected officials to hold rates in their current 3.75-4% range, with the focus instead on Warsh’s language and comments on the economy.

Data from CME Group’s FedWatch Tool showed 90.6% odds of a pause at Wednesday’s FOMC, while the outcome for the December meeting remained a 0.25% rate hike.

Fed target-rate probabilities (screenshot). Source: CME Group

Commenting, Keith Alan, cofounder of crypto trading platform Material Indicators, saw Warsh’s words potentially shifting the December odds. Between the two meetings, traders would be digesting the result of the US midterm elections on Nov. 3.

“Markets may have priced in no rate change, but they haven’t priced in the election outcome,” he summarized on Tuesday.

The tech-heavy Nasdaq Composite Index did not follow South Korea’s KOSPI Composite Index higher after the KOSPI closed up 6.6%, its best daily gain since July.

Nasdaq Composite Index one-day chart. Source: Cointelegraph/TradingView

In his latest commentary, data analyst Charl van Zyl suggested that the Fed move and the week’s key tech earnings data would materially influence market views of the health of the AI sector.

“Even after a nearly 10% two-day bounce, the index is still 34% below its June 22 record of 9,115. On Monday it closed 40% below that peak,” he noted of the index.

BTC price gains capped by 50-day moving average

After BTC price upside momentum faded, the 50-day simple moving average (SMA) at $81,831 functioned as resistance on low time frames.

Related: Bitcoin price analysis sees ‘strong rally’ as old coins become dormant

“A 4H close below $80,565 reduces the probability of retesting resistance at the 50-Day SMA,” Alan commented.

BTC/USD four-hour chart with 50-day SMA. Source: Cointelegraph/TradingView

Analyzing exchange order-book liquidity, onchain analytics platform Glassnode flagged bid liquidity moving further below $80,000, shifting the likely reversal area lower should downside accelerate.

“Only $3.4M in bids remains at $80K. The bids have moved down to $78K-79K, where orders add up to about $42M, up from about $24M in mid-October,” it wrote in the latest edition of its weekly newsletter, The Week Onchain.

“That is the largest block of bids near price, and the first place where we would expect buyers to step in on a dip.”

Bitcoin order-book liquidity heatmap (Binance). Source: Glassnode