Since March 2022, traders and so-called analysts have been forecasting a policy change or pivot from the United States Federal Reserve.\u00a0<\/p>\n
Apparently, such a move would prove that the Fed\u2019s only available option is to print into oblivion, further diminishing the value of the dollar and enshrining Bitcoin (BTC<\/a>) as the world\u2019s future reserve asset and ultimate store of value. <\/p>\n Apparently. <\/p>\n Well, on Nov. 2, the Fed raised interest rates<\/a> by the expected 0.75%, and equities and crypto rallied like they usually do.<\/p>\n But this time, there was a twist. Prior to the Federal Open Market Committee (FOMC) meeting, there were a few unconfirmed leaks stating that the Fed and White House were considering a \u201cpolicy pivot.\u201d <\/p>\n According to comments issued by the FOMC and during Jerome Powell\u2019s presser, Powell emphasized that the Fed is aware of and monitoring how policy is impacting markets and that the latency of interest rate hikes is being acknowledged and considered. <\/p>\n The Fed<\/a>\u00a0stated: <\/p>\n \u201cIn order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent 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 lags with which monetary policy affects economic activity and inflation, and economic and financial developments.\u201d<\/p><\/blockquote>\n Sounds a bit pivot-y, no? The crypto market seemed to think not, and shortly after Powell gave his live comments, Bitcoin, altcoins and equities retracted their brief single-digit gains. <\/p>\n The shock here is not that Bitcoin\u2019s price pulled back prior to the FOMC meeting, rallied after the estimated hike was announced and then retracted before the stock market closed. This is to be expected, and I wouldn\u2019t be surprised if BTC returns to the lower end of $21,000 since $20,000 appears to be solidified as support. <\/p>\n What is surprising is there was a dash of pivot language, and markets didn\u2019t react accordingly. Let that be a lesson on buying into narratives too deeply. <\/p>\n In my opinion, trading the FOMC, consumer price index (CPI) and rate hikes is not the way to go. Sure, if you\u2019re a day trader, have deep pockets to benefit from those 2% or 4% moves or are an experienced, skilled professional trader, then go for it. But, as shown in the following chart from Jarvis Labs, trading FOMC and CPI really can just chop traders up. <\/p>\n I\u2019m of the mind that intraday price moves from Bitcoin on a less-than-daily time frame are irrelevant if your motive is to be long on Bitcoin and increase the stack. So, instead of focusing on micro events like how the Fed continues to raise rates, a policy it is resolute on until inflation drops to its 2% target, let\u2019s look at other metrics that assess Bitcoin\u2019s current market structure and projected performance. <\/p>\n Related: <\/em><\/strong>Why is Bitcoin price up today?<\/em><\/strong><\/a><\/p>\n On Nov. 1, Capriole Investments founder Charles Edwards debuted a new on-chain metric called the Bitcoin Yardstick. According to Edwards, the metric takes<\/a> \u201cBitcoin Market-Cap \/ Hash-Rate, and normalized (divided by) the 2 year average\u201d to essentially take \u201cthe ratio of energy work done to secure the Bitcoin network in relation to price.\u201d<\/p>\n Edwards explains that \u201clower readings = cheaper Bitcoin = better value,\u201d and, in his opinion: <\/p>\n \u201cToday we are seeing valuations unheard of since Bitcoin was $4-6K.\u201d<\/p><\/blockquote>\n Similar to Glassnode\u2019s recent report<\/a>, Edwards also believes that long-term holders have already capitulated. After citing the chart below, Edwards said: <\/p>\n \u201cNet unrealized profit and loss (NUPL) is showing a washout in long-term holders. We have entered the capitulation zone (red) seen only once every 4 years in the past.\u201d<\/p><\/blockquote>\n As discussed in last week\u2019s Bitcoin on-chain update<\/a>, multiple on-chain metrics are at multi-year lows, and there is sufficient precedent to suggest upside gains far outweigh the downside potential at the moment. <\/p>\n Another metric causing a buzz in trader circles is the moving average convergence divergence (MACD). Throughout the week, multiple traders cited the indicator, noting a convergence between the signal line and MACD and the histogram turning \u201cgreen\u201d on the weekly timeframe as encouraging signs that Bitcoin is in a bottoming process. <\/p>\n 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 usually been accompanied by a steady uptick in bullish momentum. <\/p>\n While data is unable to confirm whether a market bottom is truly in, comparing the current readings to previous market cycles and Bitcoin\u2019s price action does suggest that BTC is undervalued in its current range. <\/p>\n BTC\u2019s price may be carving out a bottom, but this does not rule out the possibility of the occasional crypto- and equities market-related sell-off that could catalyze a swift wick down to the yearly low. <\/p>\n![](\"https:\/\/s3.cointelegraph.com\/uploads\/2022-11\/513dfc36-c806-4b00-959c-9a3a47a74af0.png\")
On-chain data suggests it\u2019s time to accumulate<\/h2>\n
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Did Bitcoin\u2019s MACD histogram turn bullish? <\/h2>\n
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