Bitcoin Price Prediction As Traders Eye Fresh Entries Post FOMC Meeting, How Far Can Dips Go?

Bitcoin (BTC) price is overheating amid calls for a pullback to allow fresh liquidity to enter the market ahead of the next rebound targeting highs above $40,000. The bellwether cryptocurrency has over the last 24 hours lost a tiny bit of its value to trade at $34,370, although it is still up 0.4% in the last seven days, 21% in one month, and 66.6% in the last year, market data by CoinGecko shows.

While optimism toward the potential greenlighting of Bitcoin spot exchange-traded funds (ETFs) is still high, the hype and discussions around the matter have gone down significantly. Trading volume across most exchanges has also slumped, with BTC recording only $13 billion, down 17% in the last 24 hours.

Meanwhile, Bitcoin ETF tickers continue to show up on the Depository Trust & Clearing Corporation (DTCC) website with the latest coming from Invesco Galaxy Bitcoin ETF with the ticker ‘BTCO.’ The first ticker belonged to BlackRock’s spot Bitcoin ETF, listed under the ticker ‘IBTC.’

A DTCC spokesperson released a statement saying that the tickers were a “Standard Practice” and did not in any way point to approval by the SEC now or in the future.

Bitcoin Price Shaky Above $34,000 Support

The largest cryptocurrency is heavily oversold based on the outlook of the Relative Strength Index (RSI). After regaining the ground from highly oversold conditions in August at 18, the RSI ascended into the overbought region last week but topped out at 87.

A gradual correction appears to be gaining momentum, with the RSI expected to enter the neutral area below 70 before the week ends. Several attempts made to clear resistance at $35,000 failed to bear fruit such that Bitcoin slipped to $33,384 at some point.

Crypto analysts and investor Rekt Capital agrees with the technical outlook that Bitcoin price is in consolidation below resistance at $35,000. He predicts that the upcoming Federal Open Market Committee (FOMC) decision on interest rates in the US could trigger a minor dive to sweep liquidly as Bitcoin retests $33,000 support.

Traders should consider preparing their new entry positions for that area as “the next target remains to be $36.5 – 37k).”

#Bitcoin still consolidating beneath resistance.

FOMC coming up, so I wouldn’t be surprised that we’ll be taking liquidity beneath us.

Retest at $33K?

Overall, that area is a clear entry point, next target remains to be $36.5-37K. pic.twitter.com/AjSqItFRvf

— Michaël van de Poppe (@CryptoMichNL) November 1, 2023

Blockchain data analytics platform CryptoQuant says that “BTC is approaching the overheat zone!” In other words, there is a glaring possibility of BTC retracing before the next significant increase.

“Futures OI entered overheating territory in June ’23, and within two months, its price plummeted. The same thing happened in Oct ’22, when the OI was still in the overheating zone. In Nov’22, there was the FTX crisis, and there was a bigger futures liquidation than in Aug ’23,” CryptoQuant said via an X post. “The OI has entered the overheating zone recently.”

Bitcoin Stands Out As Safe Haven

The spike in geopolitical tensions due to the ongoing war between Israel and Hamas is elevating BTC as a safe haven amid falling US Treasury bonds.

According to Mohamed El-Erian, the chief economic advisor at Allianz, a German financial services company, more and more people are “talking about Bitcoins, about equity and the ‘safe asset’ because they’ve lost confidence in government bonds being the safe asset,” and this is due to interest rate risk.

Bitcoin has since the Israel-Hamas war increased by at least 23% while the price of a 10-year Treasury note has fallen in the same period.

Discussions around Bitcoin becoming a safe haven asset are occurring ahead of the Federal Reserve meeting on monetary policy later today. The FOMC is expected to keep rates unchanged unchanged at a 22-year high of 5.25 to 5.5 percent.

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