Global markets and the cryptocurrency world face a busy week of economic data and central bank events between October 26-30.
At this point, according to analysts, the direction of Bitcoin could be determined by the US Federal Reserve’s (FED) interest rate decision, US growth and inflation data, the interest rate decisions of the Bank of Japan (BoJ) and the European Central Bank (ECB), the US midterm elections on November 3, and the financial results of corporate companies.
For investors, the key question this week will be whether global financial conditions will ease enough to support crypto assets. Developments to be announced on Wednesday and Thursday, in particular, are expected to increase volatility in Bitcoin.
FED’s Interest Rate Decision: The Most Important Event of the Week!
The most important development of the week will be the Fed’s interest rate decision and Fed Chairman Kevin Warsh’s press conference, to be announced on Wednesday, October 28th. Markets are expecting the current interest rate range to remain at 3.75-4.00%. Therefore, investors are focusing not only on the interest rate decision but also on future monetary policy messages. In this context, messages indicating that interest rates will remain high and monetary policy will remain tight for an extended period could put pressure on Bitcoin. Conversely, more moderate statements pointing to a decline in inflation and the possibility of future interest rate cuts could support demand for risky assets. However, keeping interest rates unchanged alone will not be considered a bullish signal for Bitcoin. The extent to which the decision deviates from expectations and the messages the Fed gives regarding the coming months will be influential in the market reaction.
PCE Data Will Be the Second Big Test!
The US third-quarter growth data and September Personal Consumption Expenditures (PCE) price index, expected to be released on Thursday, constitute the second major test of the week. PCE is one of the most important indicators closely monitored by the Fed when assessing inflation trends. In this context, PCE inflation falling below expectations could strengthen the expectation that interest rates may be lowered in the future, thus supporting Bitcoin. Conversely, high PCE inflation could increase concerns about a longer period of tight monetary policy, putting pressure on BTC.
What are the Critical Levels for Bitcoin?
With critical data expected for Bitcoin this week, crypto analyst Michaël van de Poppe stated that maintaining the $80,000 level is crucial for Bitcoin. According to the analyst, BTC needs to break above $87,000 to continue its uptrend. Otherwise, the price risks retesting its lows and falling below $75,000. Van de Poppe emphasized that holding the $80,000 support level could signal the end of the correction and the start of new upward attempts.
Aside from Poppe, Jack Yi, the Chinese founder of LD Capital, stated that Bitcoin has lost its support levels at $82,000 and $80,000, and that a drop below $79,000 could bring $75,000 and $71,000 into play. Yi added that his view that the previously recorded $57,000 level was the last low of the current bear market remains unchanged. Noting that it is difficult to determine the precise timing for a potential decline, Yi emphasized that investors should focus on buying opportunities at lower prices.
*This is not investment advice.
Continue Reading: The Week That Will Determine Bitcoin’s Future Has Begun! Which Levels Should Be Watched? Analysts Evaluate!