BTC is expected to trade while gauging interest-rate trends and the direction of international affairs ahead of the U.S. FOMC and Bank of Japan meeting. A look at this week’s moves and next week’s focus.
Bitcoin came under pressure this week following U.S. employment data, tensions between the U.S. and the Middle East, and higher crude oil prices, resulting in weaker upside momentum. After Labor Day, the market as a whole became more cautious as higher oil prices and renewed inflation concerns resurfaced. Outflows from spot ETFs also weakened support on the supply-demand front.
The focus next week will be the U.S. FOMC and the Bank of Japan’s monetary policy meeting, with interest-rate expectations potentially shifting significantly depending on price trends. If the FOMC opts to keep rates unchanged, a period of dollar strength and lower interest rates could emerge, potentially providing a buying catalyst for Bitcoin. Conversely, a 0.25% rate hike could heighten caution across risk assets.
At the Bank of Japan meeting, expectations for an additional rate hike are increasing, while a narrowing interest-rate gap between the two countries could also weigh on the dollar. However, some market participants believe that an unwinding of yen carry trades could intensify downward pressure on risk assets as a whole.
Other factors that could influence market direction include the progress of deliberations on the U.S. CLARITY bill and developments in U.S.-Iran relations. The recent price range remains centered on an upside of $83,000 and a downside of $75,000.