The price of Bitcoin remained pretty volatile during the previous week, but it more or less stabilized over the weekend as the price remained largely flatlined after digesting the recent Silvergate crisis. However, Bitcoin’s price is currently under pressure as traders and investors brace for a major event that is set to take place on Tuesday in the United States.
Bitcoin Price At Risk On Powell’s Speech?
The flagship cryptocurrency is coming under significant selling pressure as the crypto market awaits the testimony of the Federal Reserve Chair, Jerome Powell, at the U.S. Senate hearing scheduled tomorrow. Market participants are expected to examine his speech in search of any hints that could indicate Powell adhering to his disinflationary strategy or backtracking his views and signaling towards a revamp of policy tightening procedures.
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In case, Powell hints at the latter, it would come as a significant blow to risk assets like Bitcoin and usher in a complete crypto crash — wiping out all the gains in an instant. Since the markets have not heard from Chairman Powell in more than three weeks, they will be particularly eager to hear what the Fed Chief has to say and whether there is a possibility of a bigger interest rate hike for the month of March. There are already market-wide speculations on a potential 50bps rate hike, which would be significantly higher than the last hike of 25bps.
Should You Buy The Dip? Trading Data Suggests So
According to a prominent crypto trading expert, who goes by the pseudonym MacroCRG on Twitter, acknowledged the fact that the Open Interest (OI) for BTC had risen significantly with the addition of $100 million, although the price remained stagnant. For the unaware, OI is a measure of the flow of money into a futures or options market. Increasing open interest represents new money entering into the market while decreasing open interest indicates money flowing out of the market.
Moreover, he goes on to mention that holding a long position in Bitcoin would be particularly prudent in the event that Bitcoin’s price drops early in the week while all the existing long transactions are being liquidated. This scenario would make a lot of sense if in case BTC gets crushed after the Fed’s testimony as discussed earlier. As a result, if there are any price dips, it may present traders and investors with a viable buying opportunity.
Additionally, it should be noted that BTC’s technical analysis (TA) indicators at CoinGape’s crypto market tracker recommend a “Neutral” position as summarised by moving averages that suggest a “sell” at 9 and “buy” at 9 as well. As things currently stand, the price of Bitcoin (BTC) is trading at $22,452 which represents a gain of 0.06% over the past 24 hours, in contrast to a drop of 5.75% over the last seven days.
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