Bitcoin price remains at its current levels and is losing momentum in the shorter time frame. The recent sideways price action of the crypto market appears to be related to upcoming macroeconomic events and their potential impact on global markets.
At the time of writing, bitcoin price is trading at $20,500 with sideways movement over the past 24 hours and a 6% gain over the past week. Other cryptocurrencies in the top 10 by market capitalization are showing strength as BTC moves sideways, with Dogecoin (DOGE) leading, followed by Ethereum (ETH) and Solana (SOL).
Bitcoin price, volatility risk a spike in the short term
The price of bitcoin is heavily influenced by macroeconomic forces. The US Federal Reserve (Fed) is trying to contain inflation by tightening its monetary policy, raising interest rates and reducing global liquidity.
As a result, bitcoin and the risk-averse asset have moved to the downside for 2022. In October, BTC showed a higher correlation with traditional assets due to increased economic uncertainty.
according to recent report good By Arcane Research, this status quo is likely to continue. The research firm believes that the bitcoin price mid-term will still suffer from high correlation to macroeconomic forces.
Fed Chairman Jerome Powell is facing enormous pressure from internal and external agents in the United States to step up his monetary policy. If Powell gives up, the price of bitcoin is likely to profit and increase its bullish momentum.
However, Arcane Research believes that Powell is more likely to remain in its current course, preparing the market for further interest rate hikes. The financial institution and its leadership seek to moderate inflation in the US dollar regardless of the fall in global markets.
During tomorrow’s Federal Open Market Committee (FOMC) meeting, Powell may offer more clues. Markets are expected to rise further, but any sign of slowdown could trigger another uptrend.
Bitcoin market susceptible to squeeze
In that sense, Arcane Research records two factors that may have contributed to a potential uptrend. The first is the high leverage in the crypto market.
Short positions continue to pile up as the price of bitcoin moves upwards. These conditions are fuel for BTC if the market takes the long way.
Additionally, yesterday’s FOMC meeting could see volatility that could allow Bitcoin to squeeze out these short positions and reclaim the territory it lost earlier. As noted by Arcane Research, volatility during these events is historically high.
However, the same is true for the smaller side of this trade. If the market reacts further tightening, anticipating a Fed exit, the cryptocurrency could suffer losses and revisit the bottom of its range at $18,600. Mysterious Research noted:
Prepare for volatile markets in early November, as the event calendar is very busy in the first half of the month. Tomorrow comes first.