'Too early' to say Bitcoin price has reclaimed key bear market support — Analysis
BTC price action is back above the 200-week moving average, but the Fed may still sour the mood.
Bitcoin (BTC) crept higher after the June 14 Wall Street open as analysts hoped that long-term support had been preserved.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Hopes for “relief” from FOMC meeting
The pair had seen a strong bounce after nearing $20,800, with traditional markets likewise recovering after panic set in over United States inflation.
Eyeing where Bitcoin could go next, on-chain analytics resource Material Indicators noted that the market had reclaimed the 200-day simple moving average (200 SMA), an important feature of Bitcoin bear markets that acted as support throughout previous price cycles.
Nonetheless, it was “too early to tell” if the 200 SMA would continue to provide an attractive zone, a tweet stated, with the Federal Reserve due to provide inflation cues on June 15.
#BTC just reclaimed the 200 Week MA. Some decent bid liquidity seen on #FireCharts, but too early to tell if it will hold. Expect all eyes to be on the #FOMC conference Wednesday. pic.twitter.com/OEV18iTSrD
— Material Indicators (@MI_Algos) June 14, 2022
Keeping the Fed in mind were most crypto social media commentators, as expectations showed that the majority now favored an outsized rate hike next — 75 basis points instead of 50.
Tomorrow’s FOMC expectations are weighted heavily towards extreme 150-175 bps rate hikes pic.twitter.com/l5EW64mnvP
— CRYPTO₿IRB (@crypto_birb) June 14, 2022
“Currently the market gives a 96% probability that the Fed delivers a 75bps hike on Wednesday. The market had recently been pricing in a 50bps hike but last week’s hot inflation data changed that sentiment. (This time last week a 75bps hike was given ~4% chance of occurring),” popular Twitter account @tedtalksmacro wrote in one of a series of tweets on the day.
“Maybe they provide some relief,” Decentrader co-founder Filbfilb agreed in his own post.
Time to buy, says metric in green for first time since $3,600
Meanwhile, excitement was brewing over an on-chain metric reaching the “buy” zone for the first time since March 2020.
The MVRV-Z score, an expression of how many standard deviations spot price is away from realized price, returned to negative territory as BTC/USD dived under $23,400.
MVRV-Z has historically caught the generation price bottoms of Bitcoin, and buying in its green zone has thus resulted in significant returns.
Cointelegraph reported on the significance of Bitcoin’s realized price earlier in the week.
Bitcoin MVRV-Z score chart. Source: Glassnode
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