Bitcoin Under Pressure: Macroeconomic Factors Set to Define Week’s Crypto Trajectory

Bitcoin (BTC) finds itself at a critical juncture, having languished around the crucial $88,000 support level since the weekend. The cryptocurrency’s price action signals significant weakness, particularly when contrasted with the more pronounced volatility observed in precious metals like gold and silver. BTC has once again slipped below its descending trendline, oscillating in a precarious position that increasingly points towards a potential sharp downward correction. The probability of such a decline is mounting daily; a decisive break above $92,000 this week is imperative to avert what otherwise appears to be an almost certain bearish trajectory.

Federal Reserve Decision and Powell’s Press Conference in Focus

Today, all eyes are on the Federal Reserve’s evening interest rate decision. Market consensus widely anticipates the Fed will maintain the current policy rate, holding it steady within the 3.5% to 3.75% range. With the earliest significant rate cut widely projected for post-June, this decision is unlikely to inject substantial immediate stimulus into the market. Instead, the subsequent press conference by Chair Jerome Powell will command paramount attention. Investors will be scrutinizing his commentary on inflation for any hawkish undertones, which could introduce considerable downside risk across financial markets, including cryptocurrencies.

Looming US Government Shutdown Adds Layer of Uncertainty

Compounding the market’s anxieties is the escalating probability of a U.S. government shutdown by month-end. Predictions on platforms like Polymarket have surged to an alarming 80%. As previously highlighted, a government shutdown typically exerts significant downward pressure on U.S. equities, an impact that inevitably ripples through and influences the broader cryptocurrency landscape. The prevailing political instability in the United States has rendered markets exceptionally sensitive, evidenced by the continuous ascent in precious metal prices. This “flight to safety” dynamic simultaneously suggests an increased likelihood of deeper corrections for risk assets. Consequently, close monitoring of U.S. market developments this week is absolutely crucial for investors.