Bitcoin Struggles at $85,000 as FOMC Meeting Looms

Bitcoin's price has been struggling to surpass the $85,000 mark, with attempts to break through this resistance level failing since March 12. The cryptocurrency has formed daily highs between $84,000 and $85,200 but has not been able to close above $84,600. This price range is characterized by uncertainty and significant risk, with external events and conflicting market sentiment contributing to the dynamic tension.

With the Federal Open Market Committee (FOMC) meeting scheduled for March 18-19, market volatility is expected to increase. The critical announcement on interest rates will be made on March 19 at 2 pm ET. According to the CME’s FedWatch tool, there is a 99% chance that the current interest rates will remain between 4.25% and 4.50%, leaving just a 1% probability of a 0.25% rate cut. However, the market is focused on Jerome Powell, the US Fed chair’s speech during the FOMC meeting. Given the recent data, Powell’s stance is likely to be hawkish. The Consumer Price Index (CPI) remains at 2.8%, which is still above the Fed’s 2% primary target, and the Personal Consumption Expenditures (PCE) price index stood at 2.5%-2.6%. Unemployment data remains low at 4.1%, with an annual GDP growth of 2.3% in Q4 2024, indicating the economy does not need immediate stimulus.

Meanwhile, Polymarket now says there’s a 100% chance that the US Federal Reserve will conclude quantitative tightening (QT) by April 30, which would boost the odds of a rate cut as early as this summer. For Bitcoin to target higher highs at $90,000, it must flip the $85,000 resistance level into support. To achieve this, BTC/USD must first regain its position above the 200-day exponential moving average (EMA) on the 1-day chart. BTC price dropped below the 200-day EMA on March 9 for the first time since August 2024. One positive catalyst for the bulls could be renewed demand from spot Bitcoin ETFs. On March 17, Bitcoin ETFs registered $274 million in inflows, the largest since Feb. 4.

The bears, meanwhile, will attempt to keep $85,000 resistance in place, increasing the likelihood of new lows under $78,000. The immediate target below previous range lows lies at $74,000, i.e., the previous all-time high from early 2024. Below $74,000, the next key area of interest remains between $70,530 and $66,810, with a daily order block. Reaching $69,272 would be a retest of the US election day price, erasing all of the “Trump pump” gains. SuperBitcoinBro, an anonymous BTC analyst, highlights that the “worst case” scenario for Bitcoin lies at $71,300 and $73,800, which can be a potential support in every timeframe from daily to quarterly. Similarly, Nebraskangooner, another popular Bitcoin analyst, says that the FOMC is a wildcard, explaining that BTC must reclaim $86,250 to confirm the bullish scenario on the lower time frame. However, as illustrated in the charts, he expects a possible retest near the $70,000 level over the next few weeks.