FOMC Decision Looms Large Over Crypto Market as Bitcoin Struggles to Find Support

The cryptocurrency market was in a state of flux ahead of the FOMC rate decision, with traders largely sitting on their hands and waiting for the release of the Fed's policy statement. The news that the CLARTY Act, a digital-asset market-structure bill, had failed to advance to full Senate consideration, added to the pessimism in the crypto space.

Bitcoin, however, was not looking promising after breaking out of weeks of consolidation with a breakdown yesterday. The resistance at $80K-$82K held firm in early September, triggering an unwinding of longs and a subsequent drop below support near $76.2K.

Yesterday's price action saw Bitcoin give up all its Monday gains and some more. It had rallied above $79K on Monday but ran into resistance later in the day, leading to a pullback from the highs. For now, it has found support around the $75K-$75.5K area.

The chart suggests that if Bitcoin goes below the psychologically important level of $75,000, there is little obvious support until the 200-day moving average of $70,200/$300 area. This could lead to a sharp correction to around this level or even lower, pending the FOMC decision.

On the other hand, if Bitcoin forms a bullish reversal candle on a closing basis, it could be an early indication that it is ready to break higher. However, for confirmation, a clear break above the major resistance zone below $80,000-$82,800 is needed to form a higher high.