Bitcoin price: Prepare for a very exciting and volatile day
Bitcoin (BTC) may be facing an important day. The expectation is that it can become very volatile again today. In the past two days, bitcoin has remained calm and the price rose steadily from $29,000 to $29,200. Although bitcoin touched $29,300 several times, the price was rejected each time.
The BTC price at the time of writing is 29,204 on Binance and €26,383 on Bitvavo. This means that the bitcoin price is 0.2% in the plus today. Its total market capitalization is $568 billion and its dominance is 48.4%. The Fear & Greed Index stands at 51 (Neutral).
Bitcoin mining difficulty goes down today
First comes the adjustment of the so-called bitcoin mining difficulty, or difficulty level. It is estimated that in about 6 hours after publication of this article, i.e. at 4 o’clock this afternoon, the difficulty level will be adjusted.
According to data from BTC.com, the mining difficulty will be reduced by 3.4% this time. That may ease the pressure on miners, although they have already sold a large part of their stock in recent weeks.
Bitcoin network is growing again
According to analyst Ali Martinez, meanwhile, we see the bitcoin network growing again with new users after a period of contraction. That’s usually a bullish sign for the price over the long term.
Echter meldt analist Axel Adler Jr dat nieuwe adressen zeer weinig activiteit tonen. Het zijn voornamelijk oudere adressen en dat kan betekenen dat het om handelaren gaat die hun BTC willen verkopen, maar dat is erg speculatief.
According to analysis company Santiment, we do not see any net inflow of BTC to exchanges. Despite the dip in price, we see just the opposite: bitcoin continues to flow steadily out of crypto exchanges. That too is bullish in the long run.
U.S. bank in trouble again
Then we have another striking development. You may remember the banking crisis earlier this year that caused a significant rise in the price of bitcoin. Yesterday we saw signs of such problems again at PacWest Bancorp. The bank was quickly rescued this time by Banc of California.
BTC price still stuck in very tight range
Meanwhile, bitcoin is still in an extremely tight range, but that may finally change today. Usually a long period of consolidation is followed by a violent price movement.
FOMC today: volatility is expected
At 20:00, the Federal Reserve announces its interest rate decision after the Federal Open Market Committee (FOMC) meeting. The market has been expecting a 0.25% rate hike for some time now and that may be the last (or second to last) time this year.
Just as important is perhaps the speech by Fed Chairman Jerome Powell, which will take place half an hour later at 20:30 Dutch time. Then we may get to know more about what the Fed is up to in the coming months and that may determine the direction of the markets.
Whether bitcoin actually breaks out of the current range today remains to be seen. There is still a great lack of liquidity. Nevertheless, it’s a good idea to prepare for expected volatility today.
