Critical Bitcoin Levels to Monitor Before Fed Chair Powell’s Address

Bitcoin’s (BTC) price encountered another setback in its attempts to surpass resistance at $94,000 on Tuesday, as market volatility surged ahead of the Fed’s rate decision on Wednesday.

Key takeaways:

• The likelihood of a 25 bps cut on Dec. 10 is now at 96%, according to Polymarket.

• BTC price could decline to $84,000 if crucial support levels fail.

96% chances of a 25 basis points cut

The final US Federal Open Market Committee (FOMC) meeting of the year commenced on Tuesday, with an interest rate policy decision anticipated on Wednesday at 2:00 pm ET.

Market participants predict the Federal Reserve will decrease interest rates by 0.25%, representing its third cut of the year.

Related: Bitcoin FOMO returns at $94K, but Fed could disrupt the momentum

Polymarket indicates a 96.8% probability that interest rates will be adjusted to between 3.50% and 3.75%, with a mere 3% chance of rates staying the same.

However, any potential bullish market response due to lower interest rates may already be reflected in current prices.

Bitcoin was retreating towards $92,000 on Wednesday as concerns grew that Fed Chair Jerome Powell’s speech post-meeting could unsettle the market.

“Yesterday’s weak jobs report slightly dimmed rate-cut expectations and unsettled traditional finance markets; now all eyes are on the Fed and wage data,” Bitcoin analyst AlphaBTC noted in a Wednesday post on X, adding:

“If the Fed surprises with a hawkish stance or wages remain stable, expect another sell-off.”

Consequently, the market will closely monitor Powell’s remarks at the FOMC news conference for any shifts in tone.

At present, the market anticipates a “25bps rate cut, but the real excitement will stem from Jerome Powell’s address,” market commentator Wess remarked on Tuesday.

Key Bitcoin price levels to watch

Bitcoin needs to convert the yearly support level at $93,300 into a strong support to set its sights on higher peaks above $100,000.

For this to be feasible, BTC/USD must first reclaim its position above the 50-day simple moving average (yellow line) at $98,000.

The $100,000 psychological threshold is crucial for BTC prices, as repeated rejections from this level could trigger another sell-off, similar to what occurred in February.

Above this, a significant supply zone stretches up to $108,000, where the 200-day SMA resides. This trendline was lost on Nov. 3 for the first time since April 22.

Bulls must also overcome this hurdle to enhance the likelihood of BTC advancing to $110,000.

Conversely, bears will strive to uphold the $94,000 yearly open resistance level, increasing the probability of new lows below $90,000.

A key point of concern lies between $90,000 and the previous range lows at $87,500, reached on Sunday. Below that, the next move would involve revisiting the Nov. 21 lows of $84,000, reversing all gains made over the past three weeks.

Bitcoin analyst AlphaBTC observed BTC’s movement towards $98,000, cautioning that a drop below $91,000 would be disastrous for the market.

“But Bitcoin must hold above 91.5K now IMO, otherwise we will see blood in the streets.”

The Bitcoin liquidation heatmap indicates a significant liquidity cluster between $93,000 and $96,000. Below the current price level, the target area to monitor is $91,500.

This highlights potential price fluctuations depending on the outcome of today’s FOMC meeting.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.