Bitcoin Price Stagnates Below $85K: Key Levels to Monitor Ahead of FOMC

Bitcoin’s price is currently caught in a tug-of-war between bullish and bearish sentiments as it hovers below the critical resistance level of $85,000. This situation has created a landscape of uncertainty, particularly with the upcoming Federal Open Market Committee (FOMC) meeting scheduled for March 18-19. Traders and investors are keenly observing the market dynamics as they prepare for potential price swings in the coming days.

Current Market Dynamics

As of March 17, Bitcoin’s price has made several attempts to break through the resistance at $85,000, yet it has consistently failed to close above $84,600. This pattern has led to the formation of daily candle highs between $84,000 and $85,200, indicating a struggle for momentum. In trading terminology, Bitcoin is currently in a state referred to as “no man’s land” on the lower time frame (LTF) of the 1-hour chart. This term describes a price range characterized by uncertainty, significant risk, and dynamic tension, often influenced by external events and conflicting market sentiment.

FOMC Meeting and Interest Rate Expectations

The FOMC meeting is anticipated to bring volatility to the cryptocurrency markets, particularly for Bitcoin. The critical announcement regarding interest rates is set to be made on March 19 at 2 PM ET. According to the Chicago Mercantile Exchange (CME), there is a staggering 99% probability that the current interest rates will remain between 4.25% and 4.50%. This leaves only a 1% chance of a 0.25% rate cut, which has traders focusing on the speech of Jerome Powell, the Chair of the US Federal Reserve, during the FOMC meeting.

Recent economic data suggests that Powell’s stance may lean towards a hawkish outlook. The Consumer Price Index (CPI) remains elevated at 2.8%, exceeding the Fed’s primary target of 2%. Additionally, the Personal Consumption Expenditures (PCE) price index is reported to be between 2.5% and 2.6%. Although the CPI data released last week was lower than expected, it does not provide sufficient grounds for immediate rate cuts.

Market Predictions and Bitcoin’s Technical Levels

Market analysts are closely monitoring Bitcoin’s price movements, particularly in light of the recent data. Polymarket indicates that the US Federal Reserve may conclude its quantitative tightening (QT) by April 30, which could increase the likelihood of a rate cut as early as this summer. However, for Bitcoin to regain its bullish momentum, it must first reclaim its position above the 200-day exponential moving average (EMA) on the 1-day chart. Bitcoin dropped below this critical moving average on March 9 for the first time since August 2024.

Potential Catalysts for Bitcoin’s Price

One potential positive catalyst for Bitcoin bulls is the renewed demand from spot Bitcoin ETFs. On March 17, Bitcoin ETFs saw inflows of $274 million, marking the largest inflow since February 4. This surge in demand could provide the necessary momentum for Bitcoin to break through the resistance level at $85,000.

Conversely, the bearish sentiment remains strong, with traders aiming to maintain the resistance at $85,000. If the bears succeed, there is an increased likelihood of Bitcoin testing new lows below $78,000. The immediate target below the previous range lows is set at $74,000, which corresponds to the previous all-time high from early 2024. Should Bitcoin fall below $74,000, the next key area of interest lies between $70,530 and $66,810, where a daily order block exists.

Critical Support Levels and Analyst Insights

Reaching a price of $69,272 would signify a retest of the US election day price, effectively erasing all gains attributed to the “Trump pump.” Prominent Bitcoin analyst SuperBitcoinBro has indicated that the “worst-case” scenario for Bitcoin lies between $71,300 and $73,800, which could serve as potential support across various timeframes, from daily to quarterly.

Another well-known analyst, Nebraskangooner, has highlighted the FOMC meeting as a wildcard event, emphasizing that Bitcoin must reclaim the $86,250 level to confirm a bullish scenario on the lower time frame. This underscores the importance of the upcoming FOMC meeting and its potential impact on Bitcoin’s price trajectory.

Conclusion

As Bitcoin continues to navigate the challenging landscape below $85,000, traders and investors must remain vigilant and informed. The upcoming FOMC meeting is poised to be a significant event that could influence Bitcoin’s price movements in the short term. By monitoring key support and resistance levels, market participants can better position themselves to respond to the evolving market dynamics.