A popular analyst is studying the impact of the upcoming Federal Reserve policy meeting on Bitcoin (BTC) and the economy in general.
The anonymous InvestAnswers host first tells his 444,000 YouTube subscribers that all eyes will be on Chairman Jerome Powell during the Fed’s three-day retreat in Wyoming, noting markets will likely rally if interest rates are not going up.
“We really have to be aware that Jerome Powell is in Jackson Hole during the economic conference. It will bring much-needed clarity on the market and the trajectory of the central bank.
This will likely be the most important catalyst of the week for stocks and cryptos. Remember, if we get a hint of moderation, the market will rally.
The analyst believes the Fed can only raise rates by 1% in total or risk causing irreparable damage to the economy.
“The last time I read the Fed minutes there was so much insipid stuff that basically it could interpret that the Fed will slow its rate hikes. But don’t get too excited. We’re still in very restrictive territory.
But my thesis remains: there’s only 100 basis points left in the budget, and if they go beyond that, it’s financial armageddon.
Host InvestAnswers then presents a Bitcoin channel chart from mid-June. He observes how BTC was trending up in the range until it fell sharply last week, posting a double bottom.
“It’s the channel you’ve seen me share many times over the past six weeks. Bottom, in, out, beautiful range rider all the way up in the ascending channel.
We went through it last week. I said it had to endure, otherwise it might be ugly. We crashed, but fell to a very interesting level. We had this tour above $25,000 and then straight down.
These are daily red candles and you can see how many red days we have had. But what is very important is the support level around $20,750.
The crypto guru notes that Bitcoin previously fell to around $20,750 four weeks ago, also revealing a double bottom. He fears that BTC may lose steam after the rally that started in late July on August 18 came to a halt.
“We’ve had this double bottom for the last five days. This matches the low we had about four or five weeks ago, which is a positive sign that this support level of $20,000, $21,000 could possibly hold.
But the momentum is definitely weakening right now for Bitcoin, there’s no doubt about that. We are out of that range. The question is what will happen now?
I’m planning for next week or so, until we know what the Fed is doing, we’ll probably cut aside. And if they break bad news, it could go down to $20,000.
At the time of writing, Bitcoin is trading even and priced at $21,506.
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