Bitcoin Faces Key Resistance Ahead of FOMC Meeting

Bitcoin is currently facing a significant resistance level at $44,000 as the Federal Open Market Committee (FOMC) prepares for its meeting on January 30-31. The cryptocurrency market is abuzz with anticipation, awaiting the Federal Reserve's decision on interest rates, which is expected to have a profound effect on Bitcoin's value.

According to the latest assessments from CME FedWatch, there is a 98% probability that interest rates will remain within the range of 525-550 basis points, leaving only a 2% chance of a rate cut and effectively ruling out the possibility of a rate hike. Regardless of the outcome, Bitcoin could benefit from this scenario. A pause in interest rate hikes may signal the central bank's desire to stimulate economic growth, often improving investor sentiment and risk appetite.

The Federal Reserve's aggressive monetary policy has led to an eleven-fold increase in interest rates since March 2022 as a measure to curb inflation. However, by the end of the previous year, the Fed had kept interest rates unchanged for the third consecutive time. Previously, Fed officials had predicted a gradual decrease in rates to reach the 2% target by 2026. These forecasts also included expectations of at least three rate cuts this year, assuming a quarter-point increase each time.

While macroeconomic announcements in the United States, such as those from the FOMC, can act as catalysts for Bitcoin price changes, data from Glassnode suggests that Bitcoin's price remains relatively immune to such events.

Following the last FOMC meeting on December 12-13 of the previous year, Bitcoin's price held steady in the $42,000 to $43,000 range until year-end. Similarly, after the last rate hike at the July meeting, Bitcoin's price remained stable at $29,000 until mid-August, implying a weak correlation between Bitcoin and macroeconomic factors.

Bitcoin is currently trading at $43,500, representing an 11% increase over the past week. If Bitcoin can maintain this price level by month-end, it would mark the fifth consecutive monthly gain, signifying the longest streak of monthly growth since the bull market of 2021.