Bitcoin's Precarious Tightrope at $77,000... Is Its Fate in Chairman Powell's Hands?

▲ Jerome Powell, Bitcoin (BTC)/ChatGPT generated image ©

While the leading cryptocurrency, Bitcoin (BTC), attempts a precarious rebound, recovering the $77,000 mark, the market is enveloped in the calm before a storm, due to institutional fund outflows and geopolitical tensions in the Middle East. Bitcoin's future fate and direction now depend entirely on the U.S. Federal Reserve's (Fed) interest rate decisions and the words of Chairman Jerome Powell.

According to the investment media outlet FXStreet on April 29 (local time), Bitcoin slightly rebounded above $77,000 in Wednesday's European trading session after falling by approximately 3% over the past two days. Investors are refraining from premature trading, closely watching the Fed's monetary policy decision and Chairman Powell's press conference remarks, which are expected to be announced late on Wednesday. These remarks are a key variable that will determine the direction of the dollar (USD) and provide new rally momentum for risk assets like Bitcoin.

Analysts at virtual asset exchange Bitfinex stated that interest rates influence yields and the dollar index, which in turn directly impacts spot Exchange Traded Fund (ETF) fund flows and prices. If the Fed hawkishly freezes interest rates, Bitcoin's rise could be limited to around $72,100. Conversely, if the Fed adopts a dovish stance, opening the possibility for future rate cuts, spot fund inflows could accelerate, potentially leading to a rally into the $80,000 to $84,000 range.

Slowdown in institutional investor demand and geopolitical risks are also major factors suppressing the rally. According to SoSoValue data, U.S. Bitcoin spot funds recorded a net outflow of $89.68 million on Tuesday, following a $263.18 million outflow on Monday, ending a nine-day streak of net inflows that began in mid-April. Furthermore, U.S. President Donald Trump's abrupt cancellation of sending a special envoy to Pakistan and his expression of dissatisfaction with Iran's new peace proposal are chilling risk appetite amid uncertainties surrounding the Middle East conflict.

Technical indicators are sending somewhat mixed signals. The Relative Strength Index on the daily chart is around 58, indicating decent buying momentum, but the Moving Average Convergence Divergence (MACD) has fallen below its signal line and formed negative histograms, warning that the upward trend could slow down near strong resistance levels. Currently, Bitcoin is testing precarious support above its 50-day Exponential Moving Average (EMA) at $73,609 and its 100-day EMA at $75,660.

If the price faces downward pressure, the primary support level is around $75,680, and if it fails to hold, it could drop to $74,487 and then to $68,950. Conversely, if it expands its upward momentum, it must first break through $78,962 and the psychological barrier of $80,000. After that, it needs to overcome the 200-day Exponential Moving Average (EMA) at $82,191 and a massive supply zone around $84,410 to continue a full-fledged bullish trend.

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