Bitcoin Price: FOMC And US Rates Increase


Yesterday’s Bitcoin price move had pulled down to a local support floor near $286 (Bitstamp) and immediately began building a base for another wave of advance. With the prospect of an FOMC statement confirming US rates increases, tomorrow, the price chart should show a strong upside reaction between now and Wednesday evening.

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Bitcoin Price Analysis

Time of analysis: 05h06 UTC

Bitstamp 15-Minute Chart

Bitstamp 15-Minute Chart

From the analysis pages of xbt.social, earlier today:

By 17h00 UTC, yesterday, an advancing wave launched from the local support floor near $286 toward $300 and briefly touched $297 before entering the correction presently unfolding in the chart.

The OKCoin 3Month futures chart held near $310 for several hours and the CNY charts of BTC-China and Huobi also pushed above their 1800 CNY psych level.

The 15-minute chart, above, shows that the indicators are forming reverse divergence in relation to price as it retraces to a higher low – MACD (bottom) and RSI (second from top) are making lower lows in relation to the previous subwave downswing. The xbt.social RSI is flashing a red dot to confirm the potential reversal.

Price should soon turn up from this indicator signal and we then have the prospect of either a succession of higher highs, as per the example in the left of the chart, or a double top, as made in the middle of the chart.

$300 still looms overhead and any approach of this significant resistance level would require sufficient momentum to breach it. A gradual succession of higher highs is unlikely to achieve the required force. So, this scenario seems less likely than if price were to make a double top at $297 (a resistance lever identified over the weekend), then drop back to the support floor at $286, followed by a thrust through $300 – possibly in reaction to the the FOMC announcement.

However, what if the FOMC statement throws the market a curve-ball? There are clues in the 1-hour chart that foretell a potential shock announcement by the FOMC tomorrow and it has good potential as a trade opportunity:

[Sorry CCN.LA readers, the 1-hour chart is available only to xbt.social members!]

Life is and will ever remain an equation incapable of solution, but it contains certain known factors. – Nikola Tesla

Summary

Should price break above $300 today, in defiance of everything mentioned above, then that will be super bullish and traders should open a long position using $300 as a base and hard stop loss. Launching into a rally will confirm that market psychology has become conservative (as in cautious and safety conscious) and that larger players are shifting client funds into bitcoin in anticipation of market turmoil ahead. A surprise FOMC statement refraining from a 2015 rates increase, or with some other twist, could change the outlook from advance to decline, as immediate market risk subsides.

Bitfinex orderbook depth and Buy/Sell Volume:

 Bitfinex depth buysell volume 11h27 280715

Click here for the CCN.LA interactive bitcoin price chart.

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Disclaimer

The writer trades Bitcoin. Trade and Investment is risky. CCN.LA accepts no liability for losses incurred as a result of anything written in this Bitcoin price analysis report.

Bitcoin price charts from TradingView.
Image from Shutterstock.