But this time, there was a twist. Ahead of the FOMC meeting, there have been some unconfirmed leaks that the Fed and the White House are considering a “policy pivot”.

Per comments from the FOMC and while pressuring Jerome Powell, Powell stressed that the Fed is aware of and monitors how policy affects markets, and that delays in rate hikes are acknowledged and considered.

The Fed stated:

In order to reach a monetary policy stance that is restrictive enough to bring inflation back to 2% over time. In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the delays with which monetary policy affects economic activity and inflation, and economic and financial developments.
Seems a bit pivotal, right? The cryptocurrency market seemed to be no brainer, and shortly after Powell gave his live commentary, Bitcoin, altcoins, and stocks gave back their short single-digit gains.

The shock here is not that the bitcoin price fell before the FOMC meeting, rose after the estimated increase was announced and then fell before the stock market closed. This is to be expected, and I wouldn’t be surprised if BTC returns to the lower end of $21,000 as $20,000 appears to have consolidated as support.

Surprisingly, there was a dash of pivotal language, and the markets didn’t react accordingly. Let this be a lesson in engaging with the narrative very deeply.

In my opinion, trading FOMC and CPI and raising interest rates is not the way to go. Definitely, if you are a day trader, have deep pockets to take advantage of those 2% or 4% moves or are a skilled and experienced professional trader, go for it. But, as shown in the following chart from Jarvis Labs, trading the FOMC and CPI can really chop off traders.

BTC price action before and after FOMC events. Source: Jarvis Labs
I am aware that the intraday price movements of Bitcoin in a lower than daily time frame are irrelevant if your motivation is to be long on Bitcoin and increase the stack. So, instead of focusing on small events like how the Federal Reserve will continue to raise prices, a policy it firmly holds until inflation drops to its 2% target, let’s take a look at other metrics that assess Bitcoin’s current market structure and expected performance.

Related: Why is the Bitcoin price going up today?

The data in the series indicates that it is time to collect

Bitcoin standard scale. Source: Glassnode and Capriole Investments
On November 1st, Charles Edwards, founder of Capriole Investments, launched a new on-chain metric called Bitcoin Yardstick. According to Edwards, the metric takes “Bitcoin’s market capital/hash rate, and normalizes (divided by) the two-year average” to essentially take “the proportion of the energy work done to secure the Bitcoin network in relation to the price.”

“Fewer reads = cheaper bitcoin = better value,” Edwards explains, and in his opinion:

“Today we are seeing valuations that we haven’t heard since Bitcoin was between $4K and $6K.”
Similar to a recent Glassnode report, Edwards also believes that long-term holders have already given up. Citing the chart below, Edwards said:

“Unrealized Net Profit and Loss (NUPL) shows fading in long-term equity holders. We have entered the (red) capitulation zone that was only seen once every 4 years in the past.”
As discussed in last week’s Bitcoin On-Chain Update, many on-chain metrics are at multi-year lows, and there is enough precedent to suggest that the upside gains far outweigh the downside potential at the moment.

Has the MACD Histogram of Bitcoin Turned Bullish?
Another metric causing a stir in trader circles is the Moving Average Convergence Divergence (MACD). Throughout the week, many traders cited the indicator, pointing to the convergence between the signal line and the MACD and the histogram turning “green” on the weekly time frame as encouraging signs that Bitcoin is in a bottoming phase.

BTC 1-week MACD. Source: TradingView
While the indicator is not meant to be interpreted as a pure signal in isolation, crossovers on the weekly and monthly time frame, along with the histogram flipping from red to green, have typically been accompanied by a steady spike in bullish momentum.

While the data is unable to confirm whether a market bottom is in fact in place, a comparison of the current readings to previous market cycles and Bitcoin’s price action indicates that BTC is undervalued in its current range.

BTC price may be creating a bottom, but that does not rule out the possibility of an occasional sell-off associated with the cryptocurrency and stock market that could trigger a quick fuse to the yearly low.