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Bitcoin is consolidating below $39,000 on Monday, as investors await decisions from the Federal Open Market Committee’s two-day meeting, which will conclude on Wednesday.
The cryptocurrency
BTCUSD,
has been consolidating in the range of $37,000 to $43,000 for the past week. Bitcoin is recently trading at around $38,722, down 0.5% during the past 24 hours, according to CoinDesk data.
Fed Chairman Jerome Powell said earlier this month that the central bank intends to raise its policy interest rate by a quarter-percentage point following the end of its March meeting to combat inflation, which rose to a 40-year high in February.
“While this is seen as a negative for BTC, the markets have known about this hike for a few weeks now and have priced it in accordingly,” Nicholas Cawley, strategist at forex trading platform DailyFX, wrote to MarketWatch in an email.
“If Bitcoin can break above $39.6k with conviction then $42k becomes the next level of interest before a cluster of recent highs below $46k come into play. A break above here would turn the outlook for Bitcoin positive,” Cawley wrote.
Meanwhile, a proposal to require bitcoin and other proof-of-work cryptocurrencies to adopt more environmentally friendly practices in the European Union failed to win approval by a parliamentary committee on Monday. Proof-of-work is a consensus mechanism for crypto that requires high consumption of energy. The proposal was viewed as threatening to serve as a ban on bitcoin.
U.S. stocks turned lower Monday afternoon. The Dow Jones Industrial Average
DJIA,
inched down 0.04%, and the S&P 500
SPX,
fell 0.8%. The Nasdaq Composite
COMP,
dropped 2%.
