Bitcoin Price Prediction as ECB and BoJ Rate Decisions Loom After Warsh’s Neutral Tone

Bitcoin (BTC) price has dropped below $80,000 despite the Federal Reserve leaving interest rates unchanged at between 3.75% and 4%. The reason for this drop could be because of the looming monetary policy decisions by the European Central Bank (ECB) and the Bank of Japan (BoJ).

The two central banks are expected to leave interest rates unchanged. As we reported earlier, the Fed also left interest rates unchanged, causing a slight bounce in BTC price to $81,700 before later crashing to $79,700.

The focus is now shifting to whether the tones of the ECB and BOJ will be dovish or hawkish even as analysts warn that Bitcoin price is facing another correction.

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Bitcoin Slips Ahead of ECB and BoJ Decisions

While the ECB is expected to leave interest rates unchanged, there is uneasiness over France’s growing debt burden that has caused a decline in government bonds.

The recent turmoil in the US bond market briefly lifted Bitcoin price after the US Treasury Secretary announced bond buyback plans that boosted the market’s liquidity.

The Bank of Japan is also leaving rates unchanged on October 29, but inflation continues to weigh on the outlook as markets await the speech of BoJ governor Kazuo Ueda. A hawkish tone will likely push Bitcoin prices lower.

All the three central banks: the Fed, ECB and BoJ will likely hike rates by 25 basis points during the December meeting, further dampening the long-term outlook on Bitcoin. 77% of traders on CoinGape Prediction Markets are betting on the Fed hiking rates in December.

The rate hike expectation comes even as the Fed Chair Kevin Warsh noted that the “monetary medicine is starting to work,” adding that the Fed would wait for more information before determining policy path.

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BTC Bids at $80K Dry Up as Analysts Warn of Steeper Crash

In its latest on-chain report, Glassnode notes that the bids to purchase BTC at $80,000 have dried up, with this likely explaining why the price has failed to hold this support despite yesterday’s neutral tone by Warsh.

The initial bids that rested at $80,000 were taken out after Bitcoin price dropped on October 15 and again October 24. Glassnode notes that only $3.4 million in bids remain at this price.

Fresh bids now rest at between $78,000 and $79,000, where orders have risen to $42 million, nearly twice the $24 million in bids that rested at this zone in mid October.

Analysts are also warning of a steeper decline. Per analyst Crypto Patel, Bitcoin price may move lower to collect the sell-side liquudty at $74,911 after moving below the support at $80,000. He adds that an even deeper sweep could see Bitcoin create a higher low at $65,000.

Analyst Ella also notes that Bitcoin price has created lower highs in its drop to below $80,000. She notes that if BTC closes below $79,000 on the daily chart, the price might move towards $77,500 next.

Another analyst dubbed Mignolet on X also says that Bitcoin is currently creating a “misleading price action.” He notes that the market is gradually losing strength, and the choppy moves might continue until major events next week including the US midterm elections.

Key Levels to Watch in Bitcoin Price Ahead of ECB and BoJ Decisions

Bitcoin price has bounced above the support at $79,800 on the four-hour chart, It has defended this support multiple times since October 26.

The price will confirm a bullish future Bitcoin outlook if it can close above the midline of the FVG gap at $81,700 and then defend that price as support. Doing so could kickstart a move towards $81,500, especially if the ECB and BoJ give a dvish tone.

However, if this uptrend fails, Bitcoin will likely drop to collect liquidity at $79,200.

The MACD line on the four hour chart has created a sell signal after moving below the signal line. The RSI reading of 45 also shows that the momentum is bearish.

A move below $79,000 could occur of the two central bankers, the ECB and the DoJ lean hawkish and stress the need for tighter monetary conditions.