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Bitcoin (BTC) Reacts to the FED Policy Decision and Press Conference

By:
Bob Mason
Published: Jan 27, 2022, 02:50 GMT+00:00

The NASDAQ 100 mini sits in the deep red this morning, dragging Bitcoin into the red as the markets respond further to the FED.

Golden bitcoin coin on keyboard

A 3-day winning streak came to an end for Bitcoin (BTC) on Wednesday. While avoiding a fall back to Monday’s current month low $32,937, Bitcoin slipped by 0.40% to end the day at $36,829.

Bitcoin Reaction to the FED

Ahead of the FOMC’s announcement and FED Chair Powell press conference, Bitcoin had been up 2.74% before hitting reverse.

Bitcoin market reaction to the FOMC policy decision and rate statement was evident late in the U.S session. Bitcoin rose to a day high $38,930 before hitting reverse. The reversal continued through the FOMC press conference, with Bitcoin sliding to a day low $36,276.

BTCUSD 270122 30 Min Candles FED

A late move back through to $36,800 levels limited the damage on the day, with Bitcoin largely tracking the NASDAQ 100 which eked out a 0.02% gain.

Earlier in the month, Bitcoin had also been sensitive to the FOMC meeting minutes. Bitcoin had slumped by 2.7% within the first hour of the statement being released. This time round, Bitcoin fell by 1.10% in response to the rate statement and by 4.50% in response to the statement and the press conference.

Broader Crypto Market Has a Mixed Session

From the top 10 by market cap, Cardano (ADA) and Ethereum (ETH) rose by 3.36% and by 0.18% respectively. By contrast, Solana (SOL) and Binance Coin (BNB) fell by 2.71% and by 2.65% respectively.

The Bitcoin Fear & Greed Index

Three consecutive days in the green and a modest fall on Wednesday have influenced the Bitcoin Fear & Greed Index. Having fallen back to 11/100 on 23rd January, the Bitcoin Fear & Greed Index sits at 20/100 at the time of writing. The rise has seen the Index inch closer to a current month high 24/100 and more importantly 30/100 levels.

Bitcoin Fear & Greed Index b

The index currently sits in the red, reflecting the market’s bearish sentiment. A move back through to 30/100 and into the orange would reflect a shift in sentiment and a buying opportunity, however. Back in November, the Index had risen to 84/100 on 9th November before hitting reverse.

Bitcoin Price Action

At the time of writing, Bitcoin was down by 2.75% to $35,816. A move through the day’s $37,345 pivot would bring the first major resistance level at $38,414 and Wednesday’s high $38,930 into play.

Failure to move through the day’s pivot, however, would leave the first major support level at $35,760 in play. An extended sell-off would bring sub-$33,000 levels into play once more. The second major support level sits at $34,691.

At the time of writing, the NASDAQ100 mini was down 235.75 points, a negative signal for Bitcoin and the broader crypto market.

BTCUSD 270122

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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