Bitcoin price loses $74K support ahead of Fed rate decision, can it recover?

Bitcoin price has moved back below the $74,000 support level after three straight days of gains as investors remain cautious ahead of the Federal Reserve’s rate cut decision scheduled for later today.

After rallying more than 7% and touching around $76,000 on Tuesday, Bitcoin (BTC) gave up part of its gains, retreating below the $74,000 support level on Wednesday. Trading at $73,836, the bellwether remains 2.7% below the local high and 24% below its year-to-date high.

Bitcoin price fell as investors booked profits from its recent run before entering wait-and-see mode ahead of the Federal Reserve’s rate cut decision scheduled to be revealed at 2:30 PM UTC today.

According to market expectations, the Federal Reserve will likely hold interest rates at 3.50% to 3.75%. This situation may have been caused by inflation from rising oil prices, which have risen above $100 a barrel amid the ongoing US-Iran war in the Middle East. According to the CME FedWatch tool, the probability that the Fed will keep interest rates unchanged is as high as 98.9%.

Risky assets like Bitcoin tend to gain when the Fed lowers interest rates, while they tend to face pressure when the Federal Reserve decides to hold or raise them to fight sticky inflation.

However, it should be noted that the Fed’s interest rate decision would have already been priced in, and the market may be taking a breather before resuming its broader trend, as seen during rallies in times of macroeconomic and national uncertainty.

For Bitcoin, the main catalyst that could support a potential rebound comes from continued inflows into Bitcoin ETFs. Data from SoSoValue shows that 12 BTC ETFs extended their inflow streak to seven consecutive days, attracting nearly $1.17 billion from institutional investors.

On the daily chart, the price of Bitcoin confirmed the divergence from the upper side of the equilateral triangle pattern, a bullish continuation pattern in technical analysis.

Bitcoin price has once again moved above the Supertrend line, which has turned green, which is a sign that the short-term momentum is turning positive.

Meanwhile, the Relative Strength Index reading rose to 59 while there is still room for further gains before reaching the overbought levels of 70, where buying pressure often reaches exhaustion.

For now, traders will be keeping an eye on $76,000, the level BTC failed to break during the run on Tuesday. A break above the limit could clear the way for a $80,000 psychological milestone.

Conversely, a drop below $73,000 could lead to a change in sentiment and a deeper re-evaluation of support levels near $71,000.