Bitcoin’s price has remained stable at around $34,000, but positive on-chain signals have emerged ahead of the Federal Open Market Committee (FOMC) meeting. The US Federal Reserve is expected to announce another short-term interest rate pause during this meeting, which could have a long-term impact on Bitcoin prices. The US economy has been facing challenges such as a global pandemic, geopolitical tensions, and a supply-chain crisis, leading to double-digit inflation. In response, the Fed raised interest rates but paused in September. Fed rate announcements affect Bitcoin prices based on the change in direction. Higher rates reduce demand for risk-on assets like cryptocurrencies, while lower rates incentivize investors to put their capital into assets like Bitcoin. With recent data suggesting above-trend economic growth and a strong labor market, it is anticipated that the Fed will announce another rate pause. This could have a positive impact on Bitcoin prices.
Corporate entities and high-net-worth investors are racing to buy Bitcoin in anticipation of upcoming Fed rate cuts. On-chain data shows that there has been consistent demand from large institutional investors since the last rate pause was announced. Whale transactions, which indicate increased demand from corporate entities and high-net-worth investors, have been on the rise. Historical data trends suggest that if the expected rate pause is officially announced, Bitcoin’s price will likely increase towards $40,000.
The overall sentiment within the Bitcoin ecosystem is positive, with 79% of holders in profitable positions. If the Fed rate pause announcement further intensifies bullish momentum, the price could retest $40,000. However, there is significant resistance at $35,100 that needs to be overcome. On the downside, if the price dips below $30,000, it could invalidate the bullish prediction. The initial support at around $33,500 is expected to prevent a major reversal in price.
In summary, with positive on-chain signals and anticipation of a rate pause, Bitcoin’s price could see a significant increase towards $40,000. However, resistance at $35,100 and support at $33,500 will play crucial roles in determining the direction of the price.
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