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Bitcoin price declined slightly on Monday after nearing the resistance at $24,000.
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Macro factors will be the key drivers for Bitcoin and other asset prices.
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Consumer confidence, Fed decision, and NFP data will be in focus.
Bitcoin price pulled back slightly on Monday as investors started focusing on the key economic data from the US and the upcoming Fed decision. The BTC price was trading at $23,125, which was a few points below this year’s high of near $24,000.
Fed decision and NFP data
Macro data and events will be the key things that will drive the price of Bitcoin – and other assets this week. On Tuesday, the Conference Board will publish January’s consumer confidence data. This is an important figure that is watched closely by investors and policymakers because of the vital role that consumer spending plays in the economy. Economists expect that confidence continued rising in January as inflation eased.
The US consumer confidence data will be followed by the first FOMC decision of the year. With inflation easing and stocks and crypto prices rising, analysts believe that the Fed will deliver the second consecutive 0.50% hike. It will be extremely hawkish in a bid to reduce the enthusiasm among investors and traders.
In theory, an extremely hawkish tone will be bearish for the price of Bitcoin. Historically, crypto prices tend to rally in periods of easy money policies. However, in reality, there is a possibility that Bitcoin will rise even if the Fed sounds hawkish. That’s because investors may not believe the tone of the FOMC officials.
The Fed will likely guide to two more 0.50% rate hikes followed by a pause on interest rates as it seeks to lower inflation.
Finally, Bitcoin price will react to the latest non-farm payrolls (NFP) scheduled for Friday this week. These numbers will be important because they will guide the Fed in making its future decisions. Strong jobs numbers mean that the bank will continue sounding more hawkish in the coming meetings.
Bitcoin price prediction
The BTC price has been in a strong bullish trend in the past few weeks. It has formed an ascending channel shown in black. The coin has moved above all moving averages. Further, it has moved above the important support at $21,615, the highest point on January 18.
Therefore, there is a possibility that Bitcoin will pull back slightly ahead of the Fed decision and then rebound after the decision. As such, the coin could retest the support at $22,000 and then rise to $25,000.