Bitcoin dropped to $75,000 following the FOMC minutes release, where the U.S. Federal Reserve confirmed the maintenance of interest rates and noted rising uncertainty amid inflation and the conflict with Iran.
BTC has continued its slide for the second day in a row after the Fed decided to keep the target rate range at 3.5% – 3.75%.
Meanwhile, the regulator continues to aim for maximum employment and a long-term inflation rate of 2%. The protocol specifically mentions events in the Middle East as a factor increasing uncertainty. The Fed emphasized that it maintains flexibility in decision-making, evaluating risks on both sides of its dual mandate.
The decision to maintain rates matched market expectations; however, during Jerome Powell's press conference, Bitcoin remained under pressure.
Hyblock CEO Shubh Varma described the price move as a typical 'sell the news' reaction following the FOMC meeting, but noted that the market quickly bounced back:
‘The price quickly returned to pre-announcement levels, indicating strong underlying support.’
He also provided data confirming this dynamic:
‘The global ratio of open positions rose to 0.3, one of the highest levels, while open interest decreased during the price dip. This is classic position closing after FOMC and stop-loss hunting, rather than panic selling.’
Will support turn into resistance?
After the FOMC minutes were released, Bitcoin dropped to an intraday low of $74,937, slightly breaching the 20-day moving average at $75,664. This level was seen by many traders as key to confirming the shift from support to resistance.
As mentioned earlier, after the price broke above the channel boundary on the daily BTC chart, it needed to establish itself above the trendline. The next step is a retest of the level as support in the range of $76,500 - $75,500.
Despite meeting these conditions, the inability to hold above the 20-day moving average and break the trend resistance may indicate a weakening bullish momentum. In this case, the likelihood of a drop to the lower boundary of the channel, which has been forming for almost four months, increases.
Even before Powell's speech, Glassnode analysts noted a strengthening bearish sentiment. According to their data, traders were adding to their short positions: open interest rose after the spike to $79,000 on Tuesday, funding rates remained neutral, and there was divergence in cumulative volume delta (CVD) between spot and futures markets.
Additional analysis from Glassnode's The Week Onchain report shows that Bitcoin's price remains 'pinned below the market mean.' Support is forming in the $65,000 - $70,000 range, but weak demand is preventing the market from developing a sustainable upward movement.
According to the report, BTC failed to establish above the True Market Mean level at $79,000. Pressure also increased due to profit-taking by short-term holders and the transition of the margin futures market into a net short position, which weakened the short-term bullish momentum.
Although these factors increase Bitcoin's sensitivity to a sharper decline, analysts also note the opposite signal. Institutional capital flows into spot BTC ETFs, as well as the rise in open interest on CME, have helped form a tight accumulation zone in the $65,000 - $70,000 range.
