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Bitcoin Price Prediction: BTC Stumbles After The Fed Dashes March Rate Cut Hopes, But Experts Say This Bitcoin Derivative Is Primed To Explode

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Bitcoin price
Bitcoin price

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The Bitcoin price is down 1% in the last 24 hours to trade for $42,205 as of 5:50 a.m. EST time on trading volume that climbed 8%.

It comes after the Federal Open Market Committee (FOMC) meeting on January 31, where Fed chair Jerome Powell dashed March rate cut hopes.

Key Takeaways From Latest FOMC Meeting

During the Wednesday FOMC meeting, Fed chair said that the interest rates would remain unchanged.

He added that the first rate cut is likely to happen in May. While keeping the rate cuts unchanged was expected, market participants expected a possible cut in March. According to Powell, however, there may be no rate cuts until such a time when the Fed has greater confidence that inflation is moving toward its 2% target.

One trader and analyst, @Ashcryptoreal believes the possibility of a rate cut in May is very bullish. This is because this would be right after the halving event in April.

Bitcoin Price Outlook After FOMC Kept Interest Rates Unchanged

The Bitcoin price faced a rejection from the ascending trendline, with Powell’s remarks about March sending BTC price lower. Judging from the outlook of the Relative Strength Index (RSI), momentum is falling. If the trajectory continues, the RSI could soon execute a sell signal by crossing below the signal line (yellow band).

Its position below the 50 midline is also concerning, pointing to a bearish cycle. The Moving Average Convergence Divergence (MACD) accentuates this as it is also in negative territory. If the bears have their way, the Bitcoin price could extend the fall to the $40,726 support level. A break below this buyer congestion level could see the fall extend to the 100-day Simple Moving Average (SMA) at $40,293.

Below the aforementioned levels, the Bitcoin price could roll over into the demand zone between $38,496 and $39,895. A breach of the midline of this order block at $39,196 could confirm the continuation of the fall for the Bitcoin price, sending it to the critical support at $37,800. Beyond here, the cliff could send BTC to $30,000. A break and close below this level would invalidate the big-picture bullish outlook.

BTC price

TradingView: BTC/USDT 1-day chart

Converse Case

On the flipside, if the bulls increase their buying pressure, the Bitcoin price could push north, flipping above the ascending trendline and making the $43,750 blockade a support floor. Enhanced buyer momentum could catapult BTC to the $48,000 resistance level, or in highly bullish cases, reach for the $50,000 psychological level. This would constitute nearly 20% in gains above current levels.

On-chain Metric Perspectives Of The Bitcoin Price

Despite the bearish outlook in the Bitcoin price, on-chain metrics from Santiment suggest a buy signal for BTC. Specifically, the Market Value to Realized Value ratio (MVRV) shows BTC is ripe for buying. A close examination of this metric shows that every time the 30-day MVRV dipped below the 90-day MVRV ratio, the Bitcoin price rallied within the next 10 days. See between January 22 and 25 on the chart below, which indicates there is a “buy the dip” window that traders could take advantage of to achieve short-term gains. The MVRV metric checks the average profit or loss of traders in a given time period,

BTC MVRV

Bitcoin Santiment: MVRV ratio 30-day and 90-day

In addition, the BTC exchange supply metric has been on a steady descent since May last year. Representing dwindling reserves, it points to easing selling pressure on BTC, thereby giving the bulls a chance to take over. The exchange flow balance metric has also been showing spikes as of late.

This represents outflows from exchange wallets. It means traders are likely withdrawing their BTC from exchanges in favor of private custody.

BTC exchange flow

BTC Santiment: Supply on exchanges and exchange flow balance

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Also Read:

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