Bullish View
- Set a buy-stop at 40,000 and a take-profit at 42,000.
- Add a stop-loss at 37,000.
- Timeline: 1 day.
Bearish View
- Set a sell-stop at 38,000 and a take-profit at 36,000.
- Add a stop-loss at 40,000.
The BTC/USD pair remained in a tight range in the overnight as the consolidation phase continued as investors waited for the upcoming Fed decision by the Federal Reserve. It is trading at 39,212, where it has been in the past few days.
FOMC Decision Ahead
Bitcoin and other financial assets have been on edge in the past few months as investors focus on actions by the Federal Reserve.
Analysts expect that the Fed will embrace a more hawkish tone because of the changing situation in the economy. Recent data paint a picture of an economy that is doing relatively well.
The unemployment rate has dropped to a pandemic-era low of 3.8% while the housing market continues to strengthen.
However, the biggest risk for the economy is the rising rate of inflation. Data published last week revealed that the headline consumer inflation rose to 7.9% in February while the core CPI rose to 6.4%.
Therefore, analysts expect that the Fed will deliver its first interest rate hike since 2018 on Wednesday. Based on the recent statements by the Fed Chair, there is a likelihood that the bank will deliver a 0.25% rate hike.
Historically, a hawkish Fed tends to be bearish for Bitcoin and other risky assets. This explains why most technology stocks like Asana, Salesforce, and Apple have declined sharply in the past few months. The Nasdaq 100 index has moved to a correction zone.
Another reason why the BTC/USD pair has been in a tight range is that inflows have been a bit stagnant. According to Chainalysis, inflows have not made any significant gains in the past few weeks. At the same time, outflows have also been a bit limited.
BTC/USD Forecast
The four-hour chart shows that the BTC/USD pair has been in a narrow range in the past few days. As a result, the price is trading at the same level as the 25-day and 50-day exponential moving averages (EMA). The width of the Bollinger Bands has narrowed while the MACD has moved to the neutral level. The Average True Range (ATR) has also declined, which is a sign of low volatility.
Therefore, there is a likelihood that the pair will likely remain in this range ahead of the upcoming Fed decision. The key support and resistance levels to watch will be at 37,500 and 40,000.
