Bitcoin Bounces Back, But for How Long? Key Levels to Watch as Fed Meeting Looms

Bitcoin made a notable comeback on Tuesday, confidently reaching above $43,000. This positive turn follows a period of relative stagnation, where the leading cryptocurrency consistently traded below investor expectations.

Traders found relief as Bitcoin briefly surpassed $43,000 in their portfolios, offering hope to those monitoring its recent performance. But is it too soon to party? Let’s find out.

Deep Dive into Bitcoin’s Price Trends

An in-depth analysis on Trading View revealed the challenges Bitcoin faced recently. With unpredictable fluctuations, the cryptocurrency hovered around $42,700, causing uncertainty among investors.

The recent approval of the Bitcoin Exchange-Traded Fund (ETF) resulted in short-term holders profiting from their temporary investments. This unexpected surge influenced Bitcoin’s overall market value. Long-term holders, unwavering in their commitment, remained resilient against the cryptocurrency’s inherent volatility.

Also Read: Bitcoin Golden Cross on Horizon! Will BTC Price Start a Fresh Bull Run By January End?

Fed’s Upcoming Meeting: Key Moment?

On the horizon, the Federal Reserve is set to convene in 15 days, likely towards the end of January. The primary focus will be on determining the direction of the central bank’s monetary policy. According to the CME FedWatch tool, there is a significant 97.4% likelihood that the Fed’s Funds rate will remain within the existing target range of 5.25% to 5.50%.

“This potential reduction is seen as a move to support the economy, especially if inflation continues to align with the Fed’s stability target. However, the timing and scale of these interest rate cuts are critically important. Early or excessive cuts could reignite inflation, while delays or minimal cuts could hinder economic growth.”

In a turn of fortune, a prominent analyst from Betfinix predicts that the upcoming interest rate pause in January could act as a catalyst, potentially propelling the Bitcoin price to new heights.

Meanwhile, the crypto community awaits the outcome of the Federal Reserve meeting. We’ll keep you updated!