Bitcoin Price Climbs Above $27,000 Ahead of the FOMC Monetary Policy Meeting

Bitcoin price jumped more than 3% on Monday, hitting its highest level since August 2023 ahead of the highly anticipated FOMC meeting. At press time, the premier cryptocurrency was trading 2.70% higher at $27,244.20. The digital asset has gained nearly 5% in the month to date and 64.71% in the year to date. Bitcoin’s total market cap has climbed by 3% over the past 24 hours to $531 billion, while the total volume of the asset traded over the same period increased by almost 100%.

Fundamentals

Bitcoin price was showing signs of recovery on Monday from the losses made in the last cryptocurrency market dip. Bitcoin flipped above the important level of $27,000, while Ethereum held above important support levels. The overall cryptocurrency market was in the green with the global crypto market cap up by 2% to $1.08 trillion for the day, while the total crypto market volume increased by more than 56%.

Even so, the Crypto Fear & Greed Index, which is a major measure of the crypto market sentiment by participants, was in a fear level of 38, almost like last week’s reading. This points to a continued decline in risk appetite by investors, which could prompt them to sell further.

Despite Monday’s bullish rally, interest rate decisions due later in the week may introduce downward pressure on cryptocurrencies. The US Federal Open Market Committee (FOMC) is slated to commence its two-day monetary policy meeting on Tuesday. Investors will be closely watching the meeting, hunting for clues about the economic outlook and the Fed’s interest rate path.

A string of stronger-than-expected economic data released over the past few days renewed worries about further interest rate hikes this year by the central bank. Even so, markets are pricing in a 99% chance of a pause in rate hikes by the Fed this month. Notably, expectations for further hikes in November are growing.

The Bank of England is also expected to announce its interest rate decision later this week. Like most risk assets, cryptocurrencies are sensitive to rate expectations, so hawkish tones by the central banks could leave investor sentiment bearish.

Bitcoin Price Outlook

The daily chart shows that Bitcoin price managed to break the important psychological level of $27,000, promoting further increases. The crypto asset hit an intraday high of $27,409 earlier in the day before pulling back slightly. Bitcoin has managed to cross above the 50-day and 200-day exponential moving averages, while its RSI moved above the signal line and the neutral level.

Consequently, I expect the current bullish trajectory to be short-lived amid macroeconomic concerns. As such, the Bitcoin price is likely to pull back below the immediate support level of $26,426 in the short term. If this happens, bears will be eyeing the next support at $25,825.60. However, a breakout above the important level of $28,000 will invalidate my cautiously bearish thesis.

BTC Price Chart