BTCUSD trading set up with Fibonacci Retracement

Bitcoin's recent decline since mid-October formed a very deep correction, bouncing sharply off the 0.786 Fibonacci Retracement level on the 1D chart.

Key Points

Deep Retracement: The 0.786 level represents a severe test of the prior uptrend's strength. The bounce confirms this as a major support zone, but the depth suggests significant underlying weakness or exhaustion of bullish momentum.

Immediate Target: The price is now challenging the crucial 0.618 Fibonacci level. This "Golden Ratio" acts as the primary technical resistance. A successful break above it is necessary to confirm a potential trend reversal and resume the larger upward move.

Macro Impact (The Fed): The upcoming USD interest rate decision is the major external catalyst.

• Dovish Outcome (Rate Cut/More Cuts Expected): Likely bullish for Bitcoin, increasing liquidity and risk appetite, potentially helping it break 0.618.
  
• Hawkish Outcome (Rate Hold/Tightening Expected): Likely bearish, reducing liquidity and making it difficult for Bitcoin to hold above the $0.786$ support.
  

The market is at a critical technical resistance (0.618) coinciding with a major macroeconomic event. The Fed's decision will likely dictate if the 0.786 bounce holds, or if the deeper correction continues.