Bitcoin Price Prediction As Traders Eye Fresh Entries Post FOMC Meeting, How Far Can Dips Go?

 The price of Bitcoin (BTC) is overheating, prompting demands for a pullback to enable new liquidity into the market ahead of the next comeback, which is expected to approach highs beyond $40,000. The bellwether cryptocurrency has lost a little of its value in the last 24 hours to trade at $34,370, but it is still up 0.4% in the last seven days, 21% in one month, and 66.6% in the last year, according to CoinGecko market data.

According to Greeks.live, the market gloom is caused by low volatility and "the recent tendency of large trades to clearly favor bearishness via bull spreads and calendar." 

While enthusiasm for the probable approval of Bitcoin spot exchange-traded funds (ETFs) remains high, the hoopla and conversation around the subject have subsided somewhat. Most exchanges' trading volume has also fallen, with BTC recording only $13 billion, a 17% drop in the last 24 hours.

Meanwhile, Bitcoin ETF tickers continue to appear on the website of the Depository Trust & Clearing Corporation (DTCC), with the most recent being Invesco Galaxy Bitcoin ETF with the ticker 'BTCO.' The initial ticker belonged to BlackRock's spot Bitcoin ETF, which was denoted by the symbol 'IBTC.'

A DTCC spokeswoman stated that the tickers were a "Standard Practice" and that they did not imply approval by the SEC now or in the future.

Bitcoin Price Is Uncertain Above $34,000 Support

according to the Relative Strength Index (RSI) forecast, the largest cryptocurrency is significantly oversold. After reclaiming ground from extremely oversold conditions in August at 18, the RSI rose into the overbought range last week, peaking at 87.spreads."

A steady decline appears to be gaining traction, with the RSI forecast to go below 70 by the end of the week. Several attempts to break through resistance at $35,000 failed, causing Bitcoin to fall below $33,384 at one time.

Rekt Capital, a cryptocurrency analyst and investor, agrees with the technical forecast that Bitcoin is consolidating below resistance at $35,000. He forecasts that the next Federal Open Market Committee (FOMC) interest rate decision in the United States would cause a slight drop to sweep liquidly as Bitcoin retests $33,000 support.

Traders could consider establishing new entry positions in that area because "the next target remains to be $36.5 - 37k)."

CryptoQuant, a blockchain data analytics tool, claims that "BTC is approaching the overheat zone!" In other words, there is a strong chance that BTC will retrace before the next large surge.

"Futures OI entered overheating territory in June '23, and its price plummeted within two months." The same thing happened in October of this year, while the OI was still in the overheated zone. "There was the FTX crisis in November '22, and there was a larger futures liquidation than in August '23," CryptoQuant noted in an X post. "The OI has entered the overheating zone recently."

Bitcoin Proves to Be a Safe Haven

The rise in geopolitical tensions caused by Israel's ongoing battle with Hamas is promoting BTC as a safe haven amid plummeting US Treasury bonds.

According to Mohamed El-Erian, chief economic advisor at Allianz, a German financial services firm, more and more people are "talking about Bitcoins, about equity, and the'safe asset' because they've lost confidence in government bonds being the safe asset," owing to interest rate risk.

Bitcoin has climbed by at least 23% since the Israel-Hamas war, whereas the price of a 10-year Treasury note has dropped during the same time frame.

Discussions about Bitcoin becoming a safe haven asset are taking place ahead of the Federal Reserve's monetary policy meeting later today. The FOMC is projected to maintain rates at a 22-year high of 5.25 to 5.5 percent.