BTC/USD Forex Signal 09/12: Markets Await FOMC Tone (Video)

(MENAFN- Daily Forex) Potential signal:

• I am a buyer of BTC above 93k on a daily close.
• I would have a stop at 85k, and target 105k.

Bitcoin hovers near its April lows as extreme pessimism and sharp selling raise questions about potential value. A broad range appears to be forming, with $80,000 acting as key support while markets await the FOMC tone for direction.

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Bitcoin continues to struggle, and I think this is a very interesting market to watch at the moment due to the fact that we've seen such selling that you have to ask the question, are we finally seeing some value? When you look at the drop, we are still right around the April bottom, despite the fact that it feels horrible. And in fact, we are negative for the year, but not drastically so. The volatility in Bitcoin, of course, continues to be a problem. But I think at this point, if we can stay above $80,000, there's a real shot this thing turns around. I can admit this, and I'm not even a believer in Bitcoin. I just recognize how this market tends to move.

Maximum pessimism is part of the market right now, and that's part of what you need in a bottoming pattern. But you also want to see stability. So far, we have that. It looks like we're carving out some type of range between $80,000 and $93,000 or so. And as a result, I'll be watching this very closely. A lot could come down to Wednesday and the FOMC press conference, because if Jerome Powell sounds hawkish, that will be bad for Bitcoin, even if we do get an interest rate cut, but that doesn't necessarily mean it has to break down. It would just take away one of the reasons it could go higher.

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There's been an absolute beating in the ETF market when it comes to Bitcoin as well, but really, if I had told you three years ago that Bitcoin's going to be trading at $90,000, you would not have cared how it got here. You just would have cared that it did. I think we're still in that environment. And again, I'm not actually a Bitcoin believer. I don't believe in it at all, but I believe in the markets, and I can recognize that we're at least in the process of trying to find a floor.

If we break down below $80,000, then I think you see something much deeper and much uglier, and that could open up a move, I suppose, down to $60,000 pretty quickly. All things being equal, I do think that the institutional adoption of Bitcoin has put a little bit of a barrier to the downside in the market as well. I mean, a few years ago, this thing would probably already be down at $50,000 the way it used to melt down. And although it's been horrific to look at as of late, and certainly probably painful to own, I don't think we're going to zero; I think the pessimism is overdue.

So now the question is, can Bitcoin bore people enough to ignore it? Once you see that and a little bit of volume picking up, you could be talking about an accumulation pattern. This is something that will take time. The recoveries won't be like they used to be because it is an institutionally traded commodity essentially. And I do think it's in the process of at least trying to figure out if this is a bottom. A lot of patience will go a long way here.

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