Bitcoin (BTC) may “take out shorts” to crack $30,000 during the day’s key United States macroeconomic policy updates, analysis says.

As bets pile up over how BTC’s price will react to the Federal Reserve’s decision on interest rates, $30,000 is in sight — but a drop to below $20,000 is not off the table.

Trader plans $30,000 profit-taking

Bitcoin is hours away from what popular trader Crypto Tony calls “one of the most anticipated” Fed meetings ever.

The Federal Open Market Committee (FOMC) will decide how to tweak baseline interest rates on March 22, amid suspicions that the ongoing U.S. banking crisis has disrupted policy.

From ongoing rate hikes forecast just last month, markets are now considering the chances that the Fed will pause the cycle, data from CME Group’s FedWatch Tool shows.

Fed target rate probabilities chart. Source: CME Group

This would be a key boon for risk assets, as the Fed would be tacitly implying that the eighteen months it has spent removing liquidity from the economy has not been the silver bullet to recovery.

Liquidity is already on the up thanks to the failure of several banks, Cointelegraph reported, with a chunk of the quantitative tightening (QT) removals undone in a single week.

“So FOMC today which means one thing, VOLATALITY. No doubt we will trend sideways util the meeting, which means tread cautiously,” Crypto Tony told Twitter followers in comments on the day.

“My main play is to take profit at $30,000 if it comes.”
BTC/USD annotated chart. Source: Crypto Tony/Twitter

Markets commentator Tedtalksmacro meanwhile laid out the probabilities of each Fed path and the likely impact on risk assets.

“Slow grind upwards on Bitcoin, which means that my eyes are still focused on $28,700,” Cointelegraph contributor Michaël van de Poppe, founder and CEO of trading firm Eight, continued.

“I’m expecting us to sweep into that high around FOMC and then we’ll have some consolidation. CME gap at $28,700 too.”
BTC/USD annotated chart. Source: Michaël van de Poppe/Twitter

Van de Poppe referred to a so-called “gap” in CME Group’s Bitcoin futures markets formed when the price began a new trading week in a different position than it finished the week prior. Historically, the spot price has gone up or down to “fill” such gaps.

The gap in focus was created in June 2022, data from TradingView confirms.

CME Group Bitcoin futures 1-day candle chart. Source: TradingView

“Do you really want to get bullish?”

Adopting a more conservative view, however, popular analyst Justin Bennett warned that the current spot price trading range represents significant historical resistance.

Related: Bitcoin hits new 9-month highs above $28K as markets flipflop over FOMC

A “squeeze” of shorts could result in $30,000 appearing, he acknowledged, but a sudden dive could have the opposite effect, with longs betting that $20,000, at least, will hold.

“Look, maybe we see BTC take out short liquidations up to $30k,” Bennett summarized.

“But do you really want to get bullish at macro resistance with a massive block of long liquidations sub $20k? I don’t.”

An accompanying chart showed the extent of liquidations triggered by such a move below the $20,000 mark.

Bitcoin liquidation levels annotated chart. Source: Justin Bennett/ Twitter

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