Bitcoin Price Volatility Spikes Ahead of U.S FOMC Data

• Bitcoin price was precariously trading at a support level of around $26.6k ahead of the Fed’s FOMC meeting minutes release.
• Crypto traders expected choppy crypto markets backed by both technical and fundamental aspects.
• A hawkish than expected FOMC meeting minutes is good for the U.S. dollar but bearish for Bitcoin, with the DXY up 0.08 percent and Bitcoin dropping 3 percent to trade around $26.4k

Overview

Bitcoin price volatility spiked ahead of the US Federal Open Market Committee (FOMC) data being released on Wednesday, with traders expecting a choppy market based on both technical and fundamental factors.

Background

The FOMC meeting minutes provide insights into the economic and financial conditions that influenced their decision on interest rates, with a more hawkish than expected report likely to be beneficial for the U.S dollar but bearish for Bitcoin prices. The U.S Dollar Currency Index (DXY) was up slightly during early New York trading session, while Bitcoin dropped by 3 percent to trade around $26.4k before closing above $26k to assure a bullish outlook on relief rallies in certain areas of cryptocurrency markets.

Analysis

Crypto traders have been monitoring Bitcoin’s dominance which has presented some uncertainty in recent weeks, with it being largely supported by its weekly 200 Moving Average despite short-term losses across different time frames and altcoins making gains against BTC in recent days due to increasing demand from institutional buyers looking for diversification away from BTC into other cryptos like Ethereum and Binance Coin (BNB).

Outlook

As investors await further guidance from policymakers regarding monetary policy decisions, they will be keeping an eye out on possible correlation between FOMC meetings outcomes and subsequent movements in cryptocurrency markets as this could give them valuable insight into future trends when it comes to digital assets investment strategies going forward .

Author

Qadir Ak is the founder of Coinpedia who has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space