Wednesday could be documented as a big day for global financial markets as well as for Bitcoin news.
This is because investors look for dovish signals in Federal Reserve Chair Jerome Powell’s statement.
However, no rate cut is expected anytime soon, and any bias toward softer monetary policy could encourage capital rotation from high-performing assets such as Bitcoin and NASDAQ stocks into Europe and China.
These will still have underappreciated markets. Markets have positioned themselves for the assumption that the Fed’s policy stance will help resolve liquidity issues.
This dovish outlook can encourage investors in sectors that have fared poorly during the rate hike cycle.
Global markets may realign as inflation slows and economic data signal the start of a policy direction change.
Bitcoin News: Impact of Capital Rotation
The market is considering the effect on risk assets with the possibility of looser monetary conditions.
Bitcoin (BTC), which has had a strong 2024, may be subject to even more incredible price volatility as some of these investors shift funds to exploration, where money is less liquid.
High liquidity and optimism regarding the tech sector could also divert capital to NASDAQ stocks.
Considering the geopolitical and macroeconomic conditions, investors could be searching for alternatives that would allow them to gain more stable growth in comparison with highly speculative U.S. assets.
According to the latest data, Bitcoin stood at $82,023 as of press time. The crypto king had decreased by 1.78% over the last day. Its market cap is $1.62 trillion.
The short-term corrections don’t deter traders, as the volume, at $24.18 billion, is enormous.
Bitcoin news saw institutional investors making their foray into Bitcoin, riding the strength of Bitcoin’s performance this year, a shift in the macroeconomic trends affecting demand dynamics is likely to follow.
Bitcoin Technical Analysis: Signs of Weakness or Consolidation?
From a technical point of view, Bitcoin’s technical indicators show consolidation and potential downside.
In the last session, BTC/USD was trading close to $85,085. Traders view the price closely to key moving averages and are cautiously positioned.
Overhead resistance for any bullish breakout would need to be overcome with the 100-SMA (green) at $85,080.
A vital support zone stands at the 200-SMA (blue) at $89,112. BTC will only retain long-term bullish sentiment until it manages to move above this level.
The Volume oscillator is currently -7.49%, showing weakening momentum. If the current levels are not held, immediate support is at $80k.
There is more structural support at $78k. From a bullish point of view, a breakthrough at $85,000 will provide the opportunity to replay the area of the previous all-time high.
Bitcoin’s previous sharp rallies in the daily chart have always been followed by a correction that is in sync with the broader macroeconomic background.
Since institutional investors readjust their portfolios, Bitcoin could see more pressure to sell if Powell’s speech moves rates higher for a longer period of time.
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