Tonight marks the Federal Reserve’s much-anticipated interest rate meeting—the final decision on interest rates for the year. As for the path of monetary policy next year, whether it will include three or even five adjustments remains uncertain. For now, our focus is on this important moment.
Market Overview: Yesterday's Moves
The market saw significant volatility yesterday. After the rally to 1102, the US session saw a sharp correction. Why do I emphasize this decline? The answer lies in the size of the reversal. Yesterday’s trading range expanded by about 3200 points, rising from 1071 to 1102. However, the subsequent decline from 1102 to 1073 essentially erased the gains entirely. This suggests that further downside pressure is likely. As I noted during last night’s discussion, the decline from midnight to early hours confirmed this prediction, with the price bottoming out at 1050.
Trading Strategy for Today
Given the market dynamics, today’s trading should revolve around certain key levels. Let me break them down for you:
1. Lower Range (1000-1003): This level represents a previously congested trading area. If the price returns to this area, I would confidently consider opening positions. However, be careful - avoid over-leveraging your trades, even if this area looks attractive.
2. Intermediate levels (1012-1015 and 1034): These levels are potential entry points depending on how the market develops. However, if the price drops below 1034 too quickly, it indicates caution as the bearish momentum may intensify.
3. Critical Resistance (1062): If positive sentiment emerges and the price rebounds but fails to surpass 1062, this could be an ideal point to initiate sell trades, anticipating a continuation of the downward movement.
Fed Decision: What to Watch
At 3 p.m., the Federal Reserve will announce its interest rate decision. Here's what you need to know:
Pre-Announcement Strategy: If the price approaches 1034 before the decision, consider a long trade targeting the bounce. However, strict risk management is crucial as markets may react quickly to this announcement.
Post-Announcement Approach: If the price drops below 1034 after the announcement, the next important entry areas will be between 1012-1015 or, ideally, 1000-1003. If the price holds above these levels, it may indicate an opportunity for a long trade.
Powell effect
Federal Reserve Chairman Jerome Powell’s remarks will play a pivotal role in shaping market sentiment. A hawkish tone — which indicates a cautious or restrictive monetary stance — could impact markets, potentially sending Bitcoin prices lower. On the other hand, a dovish tone, which indicates a dovish approach to monetary policy, could spark bullish momentum and push prices higher.
For those trading news-based strategies, it is important to interpret Powell’s comments carefully and time entries and exits carefully. Be realistic with your targets and avoid over-risking.
This analysis represents my personal view. For live updates and in-depth discussion, join me tonight at 10pm on the live stream. Let’s navigate the market together during this crucial period.