Analyst Says Bitcoin (BTC) Weakening, but Crypto Markets Can Rally This Week After Fed Meeting
A popular analyst is considering how the Federal Reserve’s upcoming policy meeting will impact both Bitcoin (BTC) and the broader economy.
The anonymous host of InvestAnswers first tells his 444,000 YouTube subscribers that all eyes will be on Chairman Jerome Powell during the Fed’s three-day Wyoming retreat, noting that markets will probably rally if interest rates don’t go up again.
“We have to really be cognizant of the fact that Jerome Powell is in Jackson Hole at the economic conference. He will provide some much desired clarity on the market and the central bank’s pathway.
It’s likely to be the most important catalyst for the week for equities and cryptos alike. Remember, if we get a hint of dovishness, the market will rally.”
The analyst thinks the Fed can only raise rates by a total of 1% or risk causing irreparable damage to the economy.
“Last time I read the Fed minutes, it had so much wishy-washy stuff in it, that basically it could interpret that the Fed will slow down their rate hikes. But don’t get overly excited. We are still in very restrictive territory.
But my thesis remains: there’s no more than 100 basis points left in the budget, and if they go beyond that, it’s financial armageddon.”
The InvestAnswers host next presents a Bitcoin channels chart dating back to mid-June. He observes how BTC was trending upward within the range until falling hard last week, flashing a double bottom.
“This is the channel you saw me sharing many times over the past six weeks. From the bottom, in, out, beautiful range rider all the way up in the ascending channel.
We crashed through it last week. I said it has to support, if not it could be ugly. We did crash through, but we fell down to a very interesting level. We had that visit above $25,000 and then straight down.
These are daily red candles and you can see the number of red days we’ve had. But what’s very important is the level of support around $20,750.”
The crypto guru notes that Bitcoin previously fell to around the $20,750 level four weeks ago, also revealing a double bottom. He’s concerned BTC might be losing steam after the rally that began in late July came to a halt on August 18th.
“We had that double bottom over the last five days. It corresponds to the bottom we had about four or five weeks ago, which is a positive sign that maybe this $20,000, $21,000 level of support could hold.
But the momentum is definitely weakening right now for Bitcoin, no doubt about that. We are out of that range. The question is what will happen now?
I do anticipate for the next week or so, until we find out what the Fed does, we’re probably going to chop sideways. And if they come out with bad news, it could go down to $20,000.”
At time of writing, Bitcoin is trading even and priced at $21,506.
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