Bitcoin $30K bets greet FOMC as analyst warns over long liquidations

bitcoin (BTC) may “go short” to break $30,000 during key US macroeconomic policy updates of the day, the analysis says.

As bets mount on how the BTC price will react to the Federal Reserve's decision on interest rates, $30,000 is in the offing, but a drop below $20,000 is not out of the question.

The trader plans a take profit of $30,000

Bitcoin is hours away from what popular Crypto trader Tony calls “one of the most anticipated Fed meetings in history.”

The Federal Open Market Committee (FOMC) will decide how to adjust benchmark interest rates on March 22, amid suspicions that the ongoing US banking crisis has disrupted policy.

Building off last month's forecast of ongoing rate hikes, markets are now considering the chances of the Fed stopping the cycle, according to data from CME Group. FedWatch Tool shows

This would be a key boon for risk assets, as the Fed would be tacitly implying that the eighteen months it has spent draining liquidity from the economy has not been a panacea for recovery.

Liquidity is already on the rise thanks to the bankruptcy of several banks, Cointelegraph reportedwith a portion of the quantitative adjustment (QT) deletions undone in a single week.

“So, FOMC today, which means one thing, VOLATALITY. We will certainly trend sideways until the rally, which means tread carefully”, Crypto Tony. said Twitter followers in a summary of the day.

"My main play is to make a profit of $30,000 if it comes."

Meanwhile, markets commentator Tedtalksmacro laid out the probabilities of each Fed path and their likely impact on risky assets.

FOMC scenarios.

50bp up (outlier): short risk assets, downtrend resumes.

25 bp up (most likely): No burgers, dot plot + press conference dictate market move.

Pause (second most likely): take a long time #Bitcoin

Cutoff (outlier): mortgage the house and buy BTC pic.twitter.com/gkrPXfloEc

— tedtalksmacro (@tedtalksmacro) March 21, 2023

“Bitcoin is crawling which means my eyes are still focused on $28,700,” Michaël van de Poppe, Cointelegraph contributor, founder and CEO of trading company Eight, continued.

“I hope we get to that high point around the FOMC and then we'll have some consolidation. CME gap at $28,700 as well."

Van de Poppe was referring to the so-called “gap” in the CME Group Bitcoin futures markets that formed when its price started a new trading week in a different position than it ended the previous week. Historically, the spot price has gone up or down to “fill” such gaps.

The focus gap was created in June 2022, data from TradingView confirm.

"Do you really want to be optimistic?"

However, taking a more conservative view, popular analyst Justin Bennett cautioned that the current spot price trading range represents significant historical resistance.

Related: Bitcoin Hits New 9-Month Highs Above $28K As Markets Turn For FOMC

A "squeeze" of shorts could result in $30,000 emerging, he acknowledged, but a sudden drop could have the opposite effect: longs are betting that $20,000 will at least hold.

“Look, maybe we will see BTC take short liquidations up to $30k,” Bennett summarized.

“But do you really want to turn bullish on macro resistance with a massive block of long liquidations below $20k? No."

An accompanying chart showed the extent of selloffs, which would be triggered by such a move below the $20,000 mark.

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