Bitcoin: Investors digest crypto volatility ahead of Fed meeting
Yahoo Finance Live’s Jared Blikre breaks down how bitcoin is trading ahead of Wednesday’s Fed meeting.
RACHELLE AKUFFO: Well, fears of Bitcoin's price action pull into view. The digital assets long-term trend hangs in the balance as the Fed's next rate hike decision fast approaches. Here with more on what to watch for Bitcoin is Yahoo Finance's own Jared Blikre. Hey, Jared.
JARED BLIKRE: Hey, there. It is all about the Fed. And, well, this is what's happened over the last 24 hours. Let's get a quick look of what happened over the weekend.
And what did I say all about the Fed when we're talking crypto? That is because crypto is very levered to the Fed's balance sheet and to its money printing operations, to monetary policy in general. So here is Bitcoin up a whopping 1/2 of a percent over the last three days.
But here's what it's done year-to-date, now up almost 40%. We haven't seen a January like this since way back in 2013. And let me just show you what was happening back then. So this is a max chart. This goes back to, what, 2009?
Now, back in 2013, you're not even gonna be able to see the line, we did have a huge run up for about four months, I believe. And is it gonna look anything like this? Well, what I want to focus on is this huge peak that we had back here in 2017. That was a high of $20,000.
Now, they say markets have price history-- price memory, excuse me. And we can see that playing out. In fact, we dip below $20,000. You might call this potentially a false breakdown. Why false? Because if the direction is now up, that would be a little bit of a scare to the downside that we often see in technical trading here.
Now, the point is, we could be on the upswing here but we have some obstacles. Now, let me show you a Yahoo Finance chart. I pulled this from our website, a little bit of copy and paste here. And what I wanted-- what I wanted to show here this is a free indicator called volume profile. This tells you all the volume that has been transacted at a given price level.
So this goes back two years. This is the top period, almost $79,000. And right here, this is $30,000. So this line right here is a huge area. And you can see, indeed, that most of the volume is concentrated between $30 and $60,000.
Now, we're also coming off a very, very strong base. The fact that this line right here at $20,000 is this big probably means that that's a very good support. And we would not want to see that violated should prices come down again. Suffice to say, once we get above $25,000, should be smooth sailing to $30,000. But that's where the rubber meets the road.
So this Wednesday with the Fed is going to be very important. As I said, these crypto assets tend to lead the Fed-- tend to lead stocks and bonds more than anything else. It is what it is. So on Fed day at 2:30 PM when Chair Powell takes the lectern, I'm gonna be watching Bitcoin to see where we might be ending the day with stocks.
RACHELLE AKUFFO: We'll have to see. That's interesting that that's becoming now an--