The Bitcoin price prediction remains bearish ahead of the interest rate decision by the Federal Open Market Committee (FOMC) on Wednesday. According to market expectations, the Fed funds rate will rise by 75 basis points, with a 20% probability that it will increase by 100 basis points or 1%. In nearly 40 years, interest rates have not risen by 1%.

The opening price of BTC/USD on September 20 was $19,544.50. It is currently trading at $19,317.3, having previously traded as high as $19,634.3 and as low as $19,193.00. Bitcoin has increased by 4.75% in 24 hours. During the previous four days, the value of BTC/USD fell by about 2.5%. There are a few economic releases that could explain the drop.

Bitcoin Price Prediction: What Can We Expect from the Fed?

Bitcoin prices fell in the previous week as a result of the Federal Open Market Committee (FOMC) meeting on September 20. Many expect the Fed to raise interest rates by 75 basis points to combat rising inflation. In August, the Consumer Price Index (CPI) showed an increase from the same time last year. This shows that inflationary pressures are still out of control.

When the two-day FOMC meeting concludes on September 21, Federal Reserve Chair Jerome Powell will announce the amount by which the FOMC has agreed to raise the federal funds rate. It is defined by the Federal Reserve Bank of St. Louis as the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) overnight.

At present, Bitcoin is likely to remain in a narrow trading range for the foreseeable future, at least until the Federal Reserve announces its most recent interest rate hike or until some other event occurs.

US Federal Reserve to Hike Interest Rate

The most recent Consumer Price Index report revealed continued rapid growth and less stability than analysts predicted. Contrary to expectations, the Consumer Price Index (CPI) increased 8.3% in August. Despite a drop in gas prices in August, inflation remained uncomfortably high. But, by the time the government announced last week that the annual inflation rate was at a painful 8.3%, that goal seemed even further away. The so-called core prices, which exclude the volatile food and energy categories, increased much faster than expected, which is much worse.

The Federal Reserve may raise interest rates by another three-quarter of a percentage point this week, making it three increases in a row to reduce the high cost of living. The US Federal Reserve has raised interest rates four times this year, for a total of 2.25 percentage points.

US Interest Rate

US Interest Rate – Source: Federal Reserve

Fed officials have “identified inflation as the public enemy No. 1,” according to Mark Hamrick, the senior economic analyst at It turns out that the US inflation rate has not decreased as much as analysts predicted. As a result, riskier assets such as cryptocurrencies may fare worse in the future.

Following the release of the CPI, the prices of volatile assets fell, with Bitcoin falling to $19,367.3. Chairman Jerome Powell believes there must be convincing evidence that inflation is declining. As a result, they plan to raise their benchmark rate into the restrictive territory and maintain it there for an extended period of time.

In a speech last month, he openly stated that the Fed’s aggressive interest rate hikes to control inflation would “bring some pain.” Americans may have a better idea of how much suffering they can expect on September 21.

Bitcoin Price Chart

Bitcoin Price Chart – Source: Tradingview

Bitcoin Price Prediction: Can Double Bottom Support $18,500 Support BTC?

The BTC/USD pair is trading lower at $18,900 after being rejected below the $19,600 resistance level. The downward trendline on the 4-hour timeframe extends major resistance near the $19,600 level. A bullish breakout of the $19,600 level could start an uptrend that could last until $20,350 or $21,500.

For the movement, the 50-day moving average is likely to extend resistance near $20,100, keeping Bitcoin in a selling trend. In addition, leading technical indicators such as the RSI support the bearish trend in Bitcoin. A break below the $18,500 double bottom support level can extend the downtrend to the $17,645 level.

For the time being, investors will be waiting for the US Federal Reserve’s interest rate decision to determine future price direction. Typically, hawkish policy or a rate hike will cause a sharp drop in Bitcoin. Alternatively, a rate hike that is less than expected or does not occur may drive a sharp uptrend in Bitcoin.

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