Monero has gone back and forth during the trading session on Wednesday as we await the FOMC statement. True, Monero itself is not necessarily driven by the FOMC statement and the Federal Reserve monetary policy, but markets, in general, are paying attention to what the Federal Reserve is going to do because it has a lot to do with what the liquidity situation will be. Remember, Monero is pretty far out on the risk spectrum, as is most crypto.
At this point, Bitcoin does look like it is trying to stabilize so that might help other smaller coins such as Monero, but it is also worth knowing that Monero is sitting just below the 50 Day EMA, as well as the 200 Day EMA. Furthermore, it looks as if there is a lot of resistance near the $235 level just above there. Underneath, the $200 level has offered a little bit of support, but quite frankly I think that is more or less going to be of the psychological variety. A lot of what happens next will come down to risk appetite in markets overall and unfortunately will probably have very little to do with Monero itself.
A breakdown below the $200 level opens up the $180 level for a target, which has been both support and resistance a couple of times in the past. After that, Monero could find itself falling all the way down to the $150 level. This will probably be a result of Bitcoin and Ethereum both falling, which tend to drag the rest of the market down with it when it has a rough patch. A very tight and hawkish Federal Reserve will almost certainly have that effect on crypto because it would have money running towards the US dollar even further than it has previously. If that is the case, crypto in general will get crushed, and the smaller coins will take the brunt of the damage.
On the other hand, if Jerome Powell does start to walk back some of the hawkish behavior, then it is possible that the markets may start to look to altcoins such as Monero, but I think that would probably be jumping the gun. We need to see Bitcoin break significantly above $40,000 before that is a real possibility. At this point, if you are a longer-term investor, a dip might offer a chance to build a position, but that is about as aggressive as I get.
