Bitcoin Recovers Above $41,000 as All Eyes Are on the Fed
Bitcoin (BTC) has rebounded above $41,000 as the United States Federal Reserve’s actions take center stage.
PPI Target Beat Indicates Declining Inflation
The November Producer Price Index (PPI) print came in lower than expected, supporting the narrative of declining inflation. Although the Consumer Price Index (CPI) print was less encouraging, it did not cause significant harm to risk assets.
The Kobeissi Letter highlighted that this is the lowest PPI inflation reading since December 2021. All eyes are now on the Federal Open Market Committee (FOMC) meeting and their decision on interest rate changes.
FOMC Meeting Sparks Volatility Concerns
The FOMC meeting, scheduled for 2 pm Eastern Time, followed by Fed Chair Jerome Powell’s press conference at 2:30 pm, is likely to generate temporary volatility in the crypto market and other sectors. However, Bitcoin’s response to macro data has been relatively muted.
According to CME Group’s FedWatch Tool, market sentiment suggests that no rate changes will occur as a result of the FOMC meeting.
Trader Focuses on BTC Price Levels for Potential Action
Bitcoin’s short-term price action currently lacks a clear trend. Existing support and resistance levels remain intact, with $48,000 identified as a crucial level to overcome for further price discovery.
A popular trader named Jelle believes that Bitcoin is flipping the mid-range level and that breaking above $48,000 could lead to significant price movement. However, he also predicts further sideways behavior in the near term.
Leveraged Bets and Liquidation Clusters
Another trader, Daan Crypto Trades, observes increasing leveraged bets and liquidation clusters as Bitcoin consolidates. He specifically highlights the $40.5K and $41.4K levels as areas to watch for potential action.
Hot Take: Bitcoin Holds Above $41,000 Ahead of Fed Decision
Bitcoin has managed to recover above the $41,000 mark as market participants eagerly await the Federal Reserve’s decision on interest rates. With declining inflation and no expected rate changes, all eyes are on the FOMC meeting and Jerome Powell’s press conference for any hints of a “Fed pivot.” Traders are closely monitoring key price levels, particularly $48,000, for potential price action. Despite a lack of clear short-term trend, Bitcoin’s reactions to macro data have been relatively subdued. As leveraged bets increase and liquidation clusters form, traders anticipate action around the $40.5K and $41.4K levels.
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