It is a crucial week for the financial markets as the United States Federal Reserve will reveal whether there will be an interest rate cut or not.

Analysts are expecting the Fed to cut the interest rate by at least 25 basis points.

The crypto market has opened the week negatively, with Bitcoin and other major cryptocurrencies underperforming.

As stated above, the major event for the week is the rate cut decision by the United States Federal Reserve.

The apex bank will announce whether there is a rate cut this month, or investors have to wait for a while.

Analysts are expecting a rate cut of at least 25 basis points, with the labour market weakening in the United States.

Fed Chair Jerome Powell hinted at the possibility of a rate cut a few weeks ago, despite President Trump stating that Powell should have cut the rate months ago.

The core Producer Price Index (PPI), which excludes food and energy, also supported an interest rate cut, signifying a decline in inflation.

The PPI dropped 0.1% month-over-month, which was lower than the 0.3% increase analysts expected.

While the CPI data was disappointing, analysts don’t expect it to affect the chances of a rate cut.

In addition to that, the rising Open Interest (OI) and funding rates on the Bitcoin blockchain suggest that traders are expecting a rally by the leading cryptocurrency. 

The BTC/USD 4-hour chart is bullish and despite Bitcoin dropping below $116K a few minutes ago.

The market might be retracing before embarking on a rally over the next few days.  

Bitcoin failed to surpass the $116k resistance after adding 3.72% to its value last week.

At press time, Bitcoin is trading at $115,600 per coin.

If Bitcoin closes above the daily resistance level of $116,905, it could rally higher and hit the psychological level of $120,000 in the coming days.

The all-time high price of $124k remains Bitcoin’s target in the medium term. 

However, for Bitcoin to extend its rally, it needs support from momentum indicators.

The 4-hour Relative Strength Index (RSI) stands at 59, which is above the neutral level of 50, indicating that BTC is gaining bullish momentum.

The Moving Average Convergence (MACD) lines also crossed over into the positive region since September 6th, suggesting a sustained bullish momentum and an upward trend ahead.

Both indicators need to surge higher for Bitcoin to target the $120k psychological level.

On the flip side, if Bitcoin fails to close above the $116,905 resistance level, the correction could continue, and BTC could extend its decline towards the next resistance and TLQ level at $113,416.

The post Bitcoin dips below $116K ahead of crucial Fed rate decision: check forecast appeared first on Invezz

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