Bitcoin might be at the tail end of its bullish flag pattern as the highly anticipated FED is set to make a decision on interest rates cuts this week.
- Exploring Bitcoin’s sentiment shift ahead of a critical week characterized by FED’s interest rates decision. Bitcoin demand slows down as uncertainty ticks higher.
Last week Bitcoin [BTC] enjoyed a healthy bounce, a move that had a significant boost on investor sentiment. However, this week, Bitcoin is off to a negative start as the market enters a critical week.
Last week’s Bitcoin rally saw the market sentiment shift from fear to neutral. However, it slipped back to fear again on Sunday, the 15th of September. The most likely reason for this is the growing uncertainty around the upcoming Federal Reserve’s decision on interest rates.
Bitcoin’s shifting fear and greed sentiment also aligned with key observations in terms of price action. Its latest rally last week briefly managed to push above $60,000.
The milestone was short-lived, leading to the formation of another lower highs as has been characteristic of BTC price action in the last few months.
Despite the above observation, Bitcoin still held on to a relatively healthy price level at $58,875. Nevertheless, the weekend pullback highlights a key point to observe about the cryptocurrency. It is now at critical point where lower highs underscore bullish weakness.
If the weak sentiment continues to hammer down on Bitcoin, then there is a chance that price may finally drop out of the current range and slip below $50,000.
On the other hand, the upcoming FED announcement about interest rates may be a bullish event. A strong market reaction if aggressive rate cuts are announced, may trigger aggressive demand. Potentially enough to push it back in the $70,000 price range and possibly higher.
Bitcoin activity slows down but could be the calm before the storm
Bitcoin metrics demonstrated growing adoption of a cautious stance recently. This was evident in the number of large transactions which dropped significantly in the last 3 days.
Roughly 17,580 large addresses were recorded on 13 September. The same metric revealed that there were 12,520 large transactions as of 15 September.
The above observation reflects the dip in exchange activity observed around the same period of time. Exchange flows dropped significantly since 13 September. Exchange inflows remained slightly higher at 5,577 BTC and outflows at 3544 BTC as of 16th September.
Bitcoin exchange flows underscore the anticipation behind the FED’s announcement. Meanwhile, political influences have been at the heart of Bitcoin’s price volatility.
Recent reports revealed that there may have been another attempt at Donald Trump’s life but he escaped unscathed.
The political influence may also have a major impact on BTC in the coming two months. This confirms that Bitcoin is currently entering a critical phase where it will likely exist its current narrow range.
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