The crypto market is treading water ahead of a key US Federal Reserve interest rate decision on Wednesday, with Bitcoin (BTC) at $58,500, down 0.2%, and Ethereum (ETH) up a modest 0.3% to $2,305.
Experts are raising red flags about bitcoin's level of resistance and volatility, especially as the market is divided on whether the Fed will choose a 25-basis-point or 50-basis-point rate cut, a key factor affecting market sentiment.
In a note sent to Decrypt, Bitfinex analysts sounded the alarm, stressing that Bitcoin's price is approaching a critical resistance point between $60,500 and $61,000.
According to Bitfinex analysts, this level has played an important role in price action since early March. A risk-off event may occur following a Federal Open Market Committee (FOMC) decision, especially if the outcome differs from market expectations.
“Spot CVD gauges remained flat over the weekend,” they wrote, “which could indicate a pause if investors are more risk-averse ahead of the FOMC decision.”
Cumulative Volume Delta (CVD) metrics track the difference between buying and selling pressures, analyzing net trading volume, helping traders identify potential price trends or reversals based on market activity.
Meanwhile, flows in Bitcoin and Ethereum ETFs paint a mixed picture as the industry watches the Fed's moves.
According to data from Soso Value, on September 16, Bitcoin ETFs netted $12.9 million in revenue, while BlackRock ETFs led the way with $15.8 million in revenue. Grayscale GBTC took out $20.7 million, Grayscale mini ETF BTC took $2.8 million and Fidelity ETF FBTC took $5 million.
However, Ethereum experienced a net outflow of $9.5 million, led by Grayscale (ETHE), which posted an outflow of $13.8 million. BlackRock ETF ( ETHA ) had $4.1 million in revenue, data shows.
Meanwhile, fairlead strategists have highlighted concerns about Bitcoin's short-term overbought conditions, reflected by indicators such as the weekly MACD and stochastics.
MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that shows the relationship between two moving averages in an asset's price and helps identify potential buy or sell signals. Stochastics is an oscillator that compares a specific closing price to a range of prices over time, used to indicate overbought or oversold conditions in the market.
The report sent to Decrypt stated that “Bitcoin's pullback to major support at $49,300 has increased the damage.” If Bitcoin breaches this support level, it could signal a long-term bearish trend for the digital asset, especially as resistance remains strong at $63,900.
Adding to the uncertainty, polymarket players are closely following the Fed's decision, with many betting on a bigger cut. According to the data, 53% of analysts predict a 50+ basis point rate cut, while 46% lean toward a 25-basis point cut.
Edited by Stacy Elliott.
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