Bitcoin is hugging the $109K handle while traders brace for the week’s biggest catalyst: the next FOMC rate decision. With gold cooling after a strong run and liquidity primed to shift, the question isn’t just “Will the Fed cut?”—it’s whether a quiet rotation into crypto is already in motion or if volatility will flush weak hands before the real move begins.

What’s Driving the Setup

Markets are pricing a binary week: a dovish tilt boosts risk assets, while a hawkish hold can pressure high beta. Historically, easier policy supports BTC as capital moves from yield plays to growth. Near-term, BTC’s tone is neutral-to-bullish with momentum indicators stabilizing and dip demand active into known levels.

Key Levels to Trade

BTC has carved a clean map: - Support: $106K–$107K (defended multiple times) - Resistance: $110K–$112K (supply zone rejecting prior rallies) - Upside objective on breakout: $112K–$115K - Downside if broken: sub-$106K opens $103K retest

Momentum context: RSI near midline leaves room either way; a slightly positive MACD favors a short-term bullish crossover if price holds above $107K.

Why This Matters to Traders

The FOMC shapes liquidity, rates, and dollar direction—all key inputs for crypto risk appetite. A cut or dovish guidance can compress real yields, bid growth assets, and nudge capital from gold into BTC. A firmer stance can spark a quick risk-off move before trend resumes. Expect widening spreads and rapid wicks around the release.

Scenarios Around the FOMC

• Dovish surprise: Fast squeeze through $110K–$112K, momentum chase toward $115K. Watch for a post-break retest to validate.
• As-expected dovish/soft hold: Choppy drift higher within range; breakout requires volume and OI expansion.
• Hawkish tone: Liquidity vacuum lower; lose $106K and $103K becomes the magnet before dip buyers re-engage.

Execution Playbook

• Pre-event: Reduce leverage; scale size down. Avoid market orders into the release window.
• Breakout plan: Wait for a 2H/4H close above $112K, then buy the retest with invalidation below the breakout candle low.
• Range trade: Fade $110K–$112K only if momentum stalls; tight stops—don’t fight a vol expansion.
• Downside hedge: If $106K fails on closing basis, look for short continuation toward $103K or use defined-risk puts/perp hedges.
• Vol strategy: Event IV is elevated; consider post-event premium selling only after direction and realized vol settle.

Risk Signals To Monitor

• DXY and U.S. 10Y yields: Rising together pressures BTC; a roll-over supports risk.
• Open Interest/Funding: Rapid OI spikes with positive funding = squeeze risk; clean OI flush can reset higher.
• Stablecoin netflows: Inflows to exchanges = dry powder for risk.
• BTC dominance: Early BTC leadership often precedes a broader alt rotation after confirmation.
• Liquidity heatmaps: Watch resting asks around $110K–$112K and bids near $106K for trap setups.

Bottom Line

This is a levels-plus-catalyst market. Respect $106K–$112K, let the Fed light the fuse, and trade the confirmation—not the first spike. One actionable takeaway: focus on a close-and-retest above $112K for continuation to $115K, and cut fast if the retest fails. Patience into the decision and precision after it will beat hero trades.

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