Bitcoin (BTC) sought cues from the United States Federal Reserve on Dec. 14 as markets waited anxiously for news on policy.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
BTC higher lows remain safe
Data from Cointelegraph Markets Pro and TradingView showed BTC/USD continuing in a range around $47,000 as Wall St. opened on Dec. 15.
The pair had hit local highs of $48,785 on Bitstamp overnight but was down 3% at the time of writing ahead of a key Fed meeting.
The Federal Open Market Committee (FOMC) will begin discussions at 2 pm Eastern Time, with expectations focusing on interest rates, inflation and asset purchase tapering.
A hawkish stance is foremost in analysts’ minds, this potentially causing pain for risk asset holders in the short term should the Fed’s approach become less liberal.
“Markets are forward-looking. Crypto is even more so because it’s not under anyone’s control. It’s the only free market left in the world,” popular crypto trader Pentoshi summarized in a Twitter discussion on the issue.
“The Fed is still adding to it’s balance sheet but at a decreased rate. Smart money prepped last month. Slow money this week.”
Traditional markets were similarly directionless, with the S&P 500 down 0.22% on the day.
As Cointelegraph reported, with Bitcoin underperforming compared to what many assumed Q4 2021 would look like, a consensus is building that 2022 will form the market cycle peak for both BTC and altcoins.
“The panic & bearish sentiment towards BTC is extreme right now. But there’s nothing extreme about this -38% retrace,” fellow trader and analyst Rekt Capital reiterated.
“Over the years, BTC has retraced 30–40% many times in Bull Markets. In fact, $BTC retraced -53% this past May -38% isn’t extreme.”
Rekt Capital previously noted that a close above $42,300 still represents a higher low formation for BTC/USD.
Fear is all around
On altcoin markets, the mood was more pronounced in its skew to the downside.
Related: Bitcoin sheds ‘dumb money’ as retail buys most BTC since March 2020 crash
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