Bitcoin (BTC) futures positions worth over $44 million were liquidated on Monday amid turbulent trade that saw the spot price of the world's largest cryptocurrency by market capitalization fluctuate by more than $1000 (over 4%) between session lows near $26,400 and new monthly highs near $27.

BTC was last trading in the $26,700 range, representing a daily increase of close to 1%.

There were no identifiable news stories or fundamental catalysts propelling the price movement.

A filing from an auditor of Binance.US stating that they sometimes found it "extremely difficult" to verify Binance's collateralization of assets may have contributed to worries that weighed on sentiment, resulting in the BTC price falling below $27,000.

But the price action was supported by 1) expectations of an interest rate hold by the US Federal Reserve later this week and 2) technical buying, with Bitcoin recently finding support at its 21-day moving average (DMA) and a downtrend that had been in effect since early August.

According to coinglass.com, approximately $32 million of the $44 million in futures position liquidations on Monday were short positions, which is not too remarkable given that BTC reached its highest level of the month so far.

This marked the largest defeat of Bitcoin bears since last Monday, when the BTC price momentarily fell below $25,000 for the first time in three months.

The price prognosis for Bitcoin deteriorated in August, when the cryptocurrency fell below its 2023 uptrend and 200-day moving average.

However, since breaching above its recent downtrend and 21DMA, things are looking brighter.

At the very least, BTC appears to have discovered a new price range between $25,000 and $28,000.

In order for a retest of the yearly highs to become likely, a break above key resistance in the $27,700-$28,500 region will be required.

Where Will the Bitcoin (BTC) Price Go Next?

This week, macro is anticipated to be a major driver of the Bitcoin price.

It is widely anticipated that the Federal Reserve will maintain interest rates on Wednesday, but will likely leave the door open for another rate hike later this year.

The central bank will be releasing its new economic forecasts and a new dot plot summary of Fed members interest rate projections – these two releases will be closely scrutinised by traders, and will be used to assess the probability of further rate hikes in 2023, and on the timing of any potential rate cuts in 2024.

While most investors do not anticipate another rate hike this year, the Fed's communication that another rate hike is possible is preventing markets from becoming unduly enthusiastic about the pricing of rate cuts in 2024 and beyond, thereby helping to support US yields and the US dollar.

Consequently, while this week's Fed meeting may not provide a negative shock, it is unlikely to provide much of a boost for Bitcoin, presuming the US dollar and US yields do not reverse sharply higher.

Bitcoin has a negative correlation with the US dollar and US yields historically.

The world's largest cryptocurrency is likely to remain within its recent multi-month range of $25,000 to $28,000.

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