Bitcoin was consolidating below a key resistance level on Tuesday, as market volatility rose ahead of the upcoming U.S. Fed decision. Tomorrow’s Federal Reserve meeting will likely see interest rates increased, as the bank battles inflation. Ethereum moved below $1,600 in today’s session.
Bitcoin (BTC) was trading below a key resistance level on Tuesday, ahead of tomorrow’s Federal Open Market Committee (FOMC) meeting.
Following a failed breakout of its $20,800 ceiling on Monday, BTC/USD slipped to a low of $20,287.46 earlier today.
Market uncertainty has spiked in anticipation of the FOMC meeting, with many expecting the Fed to increase rates by 0.75%.
BTC/USD – Daily Chart
As can be seen from the chart, price volatility also comes following a failed surge in price strength, with the relative strength index (RSI) recently failing to break a ceiling of its own.
The threat of a rate hike has boosted U.S. dollar strength, which appears to be one of the factors behind today’s consolidation.
BTC will likely continue to hover below its $20,800 ceiling until the tension of tomorrow has passed.
In addition to bitcoin, ethereum (ETH) also moved lower on Tuesday, falling below $1,600 in the process.
Following a peak of $1,630.45 to start the week, the world’s second largest cryptocurrency moved to a low of $1,555.92 today.
The drop saw ETH/USD plunge below its recent ceiling of $1,585, with price strength also declining.
ETH/USD – Daily Chart
As of writing, the 14-day RSI is currently tracking at 66.71, which is marginally above a floor of 65.00.
Due to the index continuing to trend above this floor, bullish sentiment seems to have stayed in ETH, with prices now moving away from earlier lows.
ETH is currently trading at $1,590.79, with traders attempting to send the token back above $1,600.
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Could we see markets continue to consolidate even after the Fed decision? Leave your thoughts in the comments below.
Eliman brings an eclectic point of view to market analysis, he was previously a brokerage director and retail trading educator. Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX.
Image Credits: Shutterstock, Pixabay, Wiki Commons, Nick Beer / Shutterstock.com
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