FOMC Nerves Growing

Bitcoin prices are cooling today as uncertainty kicks in ahead of the keenly awaited September FOMC meeting tomorrow. The Fed is widely expected to hike rates tomorrow and the hawkish shift in traders’ Fed expectations recently has blunted the earlier rally in Bitcoin. Traders are now waiting to hear what sort of message the Fed delivers along with the hike. If the Fed hikes and sounds firmly hawkish, signalling further hikes to come, this should see USD pushing much higher, dragging BTC lower as risk assets recoil. On the other hand, if the Fed hikes but sounds less clear over the prospect of further hikes or strikes a ‘one and one’ tone, this could see USD sold instead, allowing BTC room to push higher.

ETF Flows Shifting

In recent weeks we’ve seen a surge in BTC ETF inflows which have helped keep the market supported recently. However, this week flows have turned negative again putting an end to the three prior consecutive weeks of inflows. This shift feels well reflected in the selling we’re seeing today and if institutional players continue to exit ETFS this could amplify the selling we’re seeing in the futures market. As such, there is plenty of volatility risk seen for tomorrow and the remainder of the week.

Technical Views

BTC

The rally in BTC has stalled for now ahead of the $83,385 level though, as yet, price is holding above the $74,270 level. While that support level holds focus remains on an eventual breakout higher towards the $94,730 level next. If we break below that marker, however, focus turns to 69,605 as the deeper support to watch.