Bitcoin rises with confidence in volatile week marked by Fed decision

There´s been a rebound in the cryptocurrency market. Bitcoin (BTC) rises 0.7% in the last 24 hours to above $26,700, while Ethereum (ETH) advances slightly less at $1,630.

Many analysts expect a particularly volatile week. On the one hand, the holiday closure of the Japanese stock market for the observance of Respect for Seniors Day may have altered the usual market patterns, as a significant portion of cryptocurrency trading in Asia is driven by automated trading bots. This makes the session especially attractive for speculators, who can profit from predictable range patterns.

Meanwhile, the Federal Reserve's (Fed) monetary policy decision also threatens to move the market. While CME's FedWatch tool virtually assumes with 99% probability that the Fed will leave interest rates untouched, the market is closely watching the economic projections to be released by the Federal Open Market Committee (FOMC) and the subsequent press conference by Chairman Jerome Powell. It will also be interesting to see what the Bank of Japan's (BoJ) next move will be.

Last week, cryptocurrencies reacted well to the 25 basis points hike proposed by the European Central Bank (ECB). Investors welcomed this decision with rises as they understood that it was the last tightening of interest rates in the current cycle, which will only rise again if inflation gets out of control.

Similarly, Bitcoin has rebounded in recent hours thanks to the increase in new addresses on the homonymous blockchain. According to Glassnode data, the number of new users of the Bitcoin network exceeded 768,000 on September 15, although the figure has declined slightly in recent days. Whether there´s a decline or not, the analytics firm stressed that this data reflects the highest influx of new users in the last five months.

But that's not all. The data on active addresses in the last seven days collected by Santiment indicates a recent upward trend in this metric. The upward climb that began around September 9, when the count reached approximately 5.1 million active addresses, and now stands at close to 6 million.

"Last week we saw a noticeable return in investor sentiment. Despite the continuing regulatory difficulties facing the cryptocurrency market in its various aspects. The return of investor sentiment was evident with the rise in the number of open interests for Bitcoin derivatives to the highest levels since the beginning of this September, at more than 7.829 billion contracts," explained Samer Hasn, market analyst at XS.com.

According to the expert, the reigning cryptocurrency is facing resistance at $26,741. "While a breach above these levels may shift attention towards the 27109 level, which may be followed by the psychological level at 28000. Meanwhile, failure to consolidate above the 26405 level may shift sellers’ attention again towards the 26236 levels, which may be followed by the 25805-25944 levels," he added.

In other market news, there have been moderate falls for the main altcoins. The 0.8% rebound in Solana (SOL) is noteworthy.