Bitcoin price resists to maintain crucial 50-month average support and eyes turn to the Federal Reserve
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Answer Bitcoin price resists to maintain crucial 50-month average support and eyes turn to the Federal Reserve
Ahead of the Federal Open Market Committee meeting on Wednesday, September 21st, the price of Bitcoin came under severe selling pressure.
As of press time, Bitcoin is trading down 1.96% at $19,000.
Besides bitcoin, other altcoins have also come under selling pressure.
For reference, the $19,000 level is the 50-month average of Bitcoin and its crucial support levels.
According to data from Bloomberg, Bitcoin has been defending these levels since 2015.
Thus, if bitcoin fails to defend the support this time, it could mean more pain and a price correction for bitcoin investors.
Read:This month in 2014: a bitcoin whale dumps 30,000 bitcoins in a single transaction
The US Federal Reserve will announce a rate hike on Wednesday due to rising inflation in the USA.
The Fed’s policy decision will be key to deciding on the next Bitcoin price movement.
The market could take a breather if the Fed announces a 75bp rate hike which will be on the expected lines.
However, a 100 basis point rate hike could lead to severe selling pressure due to the potential for liquidity to be compromised.
stated John Toureau, head of trading at the digital asset trading platform, told Bloomberg:
If the FOMC advances below 100 basis points, it would make sense to see a slight rise.
This could be quite significant if the FOMC were to offer less than a 75 basis point increase, although this seems highly unlikely.
The MVIS CryptoCompare Digital Assets 100 Index is down again this week.
The index is down 60% year-to-date versus a 21% drop in US stocks.
MicroStrategy buys more bitcoin:
On Tuesday, September 20, MicroStrategy announced a new purchase of an additional 301 Bitcoin.
Read:Elon Musk returns to tweeting about Dogecoin! Here’s why
Michael Saylor, CEO of the company said:
MicroStrategy purchased an additional 301 bitcoins for about $6 million at an average price of $19,851 per bitcoin.
As of 9/19/22, MicroStrategy has approximately 130,000 bitcoins acquired for $3.98 billion at an average price of $30.639 per bitcoin.
MicroStrategy is also considering selling $500 million worth of shares to buy bitcoins and add to its reserves.
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