Bitcoin Hovering Below $ 40,000 Ahead of Fed Meeting

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Bitcoin attempted to break $ 40,000 for the second time this week, with the Fed’s FOMC policy meeting acting as a source of uncertainty.

Positive Bitcoin Consolidation Around FOMC Meeting

Markets are eyeing the Federal Reserve’s decision on when to phase out quantitative easing.

Bitcoin ignored selling pressure after Amazon denied rumors it would start accepting crypto payments, holding above the 200-day moving average at $ 34,600.

A bigger threat looms with the Fed policy meeting starting today, where U.S. central bank executives will decide to cut back on asset purchases.

If the Fed continues its dovish approach to supporting the economy via a $ 120 million bond purchase and near zero interest rates throughout 2022, BTC is likely to continue rising.

However, a hawkish stance by the Fed will hurt the story of rising inflation and potentially act as a negative catalyst for the price of Bitcoin.

At the last Fed meeting in mid-June, some hands were raised to hike rates at the end of 2022, contrary to initial plans. Markets expect the Fed to maintain the status quo by delaying the purchase until 2023, as the threat of the COVID-19 Delta variant and supply chain obstacles negatively affect the economy.

Source: TradingView

Technically, the major cryptocurrency is now facing resistance at $ 41,600 and the 50-day moving average at $ 44,500, with support at the annual opening price of around $ 28,800. BTC was last trading at $ 39,640 after hitting a high of $ 40,900 before the US market opening bell.

The S&P 500 Index opened in the green this morning, up 6.4 points, holding the benchmark of $ 4,400. Gold fell below $ 1,800 this morning as the DXY US dollar index rose 0.21%, signaling preparations for a hawkish Fed announcement.

The second largest cryptocurrency, Ethereum, is also holding above support at $ 2,150. However, ETH is approaching a deadly cross between the 50 and 200 day moving average, which can be avoided if it stays above current levels.

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