Bitcoin is starting the trading week on a bearish note, with prices dipping 2% as the cryptocurrency separates itself from the bullish performance of stocks and gold. This comes amid growing anticipation of the Federal Open Market Committee (FOMC) meeting, which is expected to influence not just traditional financial markets, but also the crypto market.
Bitcoin’s Divergence From Stocks and Gold
On Monday, Bitcoin (BTC) struggled at the $115,000 level, unlike traditional assets such as the S&P 500, Nasdaq Composite, and gold, which all made upward moves. While the S&P 500 and Nasdaq saw early gains in the week, gold surged past $3,655, climbing closer to its all-time highs.
Trader and analyst Michaël van de Poppe linked Bitcoin’s current slump to the upcoming Federal Reserve interest-rate decision. Historically, Bitcoin tends to show downward movement in the lead-up to these deliberations. Van de Poppe commented on social media, stating: “Very classic price action prior to the FOMC meeting.”
Hidden Bullish Signals Amid Bearish Sentiment
While the short-term trend appears unfavorable for Bitcoin, signs of hidden bullish divergences are sparking some optimism among traders. A weekly bullish divergence in Bitcoin’s Relative Strength Index (RSI) has been confirmed, which experts believe could signal an eventual price reversal.
BitBull, a popular trader, remained optimistic, while another market expert, Merlijn, suggested this divergence indicates a macro-level upward trend for Bitcoin, labeling BTC price upside as “inevitable.”
Market Sentiment: A “Wall of Worry”
Interestingly, both the cryptocurrency and equities markets are seeing bearish sentiment dominate, despite positive price action in stocks. According to trading firm Mosaic Asset Company, large investors are net short in various stock futures, a contrarian signal that could indicate further upside for equities.
The Crypto Fear & Greed Index, which measures general market sentiment, stood at 53/100—on neutral ground. This is far from the overheated territory above 95, where Bitcoin typically approaches its all-time highs. Lower sentiment could offer Bitcoin a chance to “climb the wall of worry” if external macroeconomic factors turn favorable.
What’s Next for Bitcoin?
Much hinges on the FOMC meeting outcome. The Federal Reserve is expected to announce a modest 0.25% interest-rate cut, a move that could impact broader financial markets and cryptocurrencies like Bitcoin. Many analysts are waiting to see whether a dovish monetary policy could serve as a catalyst for Bitcoin’s recovery and align it with bullish movements in the broader market.
For those watching Bitcoin’s price carefully, this week’s macroeconomic developments could be crucial.
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If you are new to cryptocurrency or looking to safely store your assets, consider the Trezor Model T Hardware Wallet. It provides top-notch security for managing Bitcoin, Ethereum, and other cryptocurrencies, ensuring your investment remains protected in a volatile market.
