Bitcoin faces bearish pressure ahead of Federal Reserve rate cut, with analysts predicting potential volatility and mixed reactions from major investors.
Changing Market Sentiment For Bitcoin
Amid growing institutional demand, Bitcoin is facing medium-term selling pressure, with some analysts predicting a possible drop below a key psychological level. This comes ahead of the Federal Reserve’s expected interest rate cut this week, which many believe will have a major impact on Bitcoin’s price action in the coming months.
Last week, Bitcoin surged more than 7%. However, the digital asset faced resistance at higher levels, leading to a correction. As the market prepares to enter the final quarter of the year, some expect Bitcoin to enter a parabolic growth phase. The upcoming Federal Open Market Committee (FOMC) meeting could be a turning point in shaping the future trajectory of cryptocurrency prices.
Bitcoin's Dominance Continues to Increase
Bitcoin dominance has been rising in recent months, reaching multi-year highs. Analysts like Benjamin Cowen predict this trend will continue, possibly reaching 60% dominance before falling by 2025. This decline could signal the start of altseason, when alternative cryptocurrencies see increased market activity.
Despite the volatility in Bitcoin’s price, its dominance shows that the leading cryptocurrency still holds a major influence in the market. As we approach the end of the year, Bitcoin’s market share is expected to play a significant role in shaping the performance of the overall cryptocurrency market.
Bitcoin Price Target and Technical Analysis
From a technical perspective, Bitcoin’s price action has been less steep during the recent decline, offering a glimmer of hope for potential stability. After bouncing from support above $54,000, the cryptocurrency is now eyeing a retest of its all-time high in the short term. Analysts such as Ali Martinez have noticed a rising channel forming on the 1-hour chart, suggesting that Bitcoin could push higher if buyers defend support at current prices.
Conversely, if Bitcoin fails to hold support, a drop to lower levels is possible. The 50-day moving average (MA) on the weekly chart provides some guidance, although Bitcoin has yet to reclaim a key level on the relative strength index (RSI). The coming days could be crucial for Bitcoin’s monthly close, influencing investor sentiment heading into the final quarter.
Mixed Reactions From Major Investors
While further selling is likely, recent on-chain data shows that the response from large investors, known as whales, has been mixed. Some whales have reduced their holdings, while others have maintained large positions. For example, one whale recently sold 500 Bitcoin, but still holds a significant amount of the cryptocurrency, suggesting a cautious but hopeful stance.
Whale activity often plays a key role in market movements, and their mixed reactions highlight the current uncertainty surrounding Bitcoin. As the market awaits the FOMC meeting, large investors appear to be balancing cautious selling and strategic accumulation, reflecting broader market sentiment.
In conclusion, Bitcoin’s price action in the coming days will be heavily influenced by the Federal Reserve’s decision and broader market sentiment. While technical analysis provides some insight into potential price targets, the actions of major investors and the outcome of the FOMC meeting will be key factors in shaping Bitcoin’s performance for the rest of the year.
