Autor Cointelegraph By Yashu Gola

Bitcoin (BTC) underwent a weak rebound on Sep. 21, and the U.S. dollar jumped to a new yearly high as investors await today’s Federal Open Market Committee’s interest rate decision.BTC price hold $19K ahead of Fed decisionBTC’s price has managed to cling on to $19,000 with a modest daily gain of 1.33% . Meanwhile, the U.S. dollar index (DXY), which measures the greenback’s strength versus a pool of top foreign currencies, rose to 110.86, the highest level in twenty years.BTC/USD vs. DXY daily price chart. Source: TradingViewFOMC rate hike scenariosThe Federal Reserve is poised to discuss how far it could raise its benchmark lending rates to curb record inflation. Interestingly, the market expects the U.S. central bank to hike rates by 75 or 100 basis points (bps).The ramification of higher interest rates will likely result in lower appetite for riskier assets like stocks and cryptocurrencies. Conversely, the U.S. dollar will serve as the go-to safe haven for investors escaping risk-on assets.”There seems no reason for the Fed to soften the hawkishness shown at the recent Jackson Hole symposium, and a [0.75 percentage point] ‘hawkish hike’ should keep the dollar near its highs of the year,” analysts at ING told the Financial Times.Independent market analyst PostyXBT argues that a 100 bps rate can “nuke” Bitcoin below its current technical support of $18,800. He also suggests that BTC has a good chance of recovery if the rate hike turns out to be lower than expected, or 50 bps.$BTC 1DAs us FOMC experts would know, today is a big day!100bps likely nukes support for good?50bps likely pumps and gives bulls some breathing room?Going to be a very interesting daily close https://t.co/C5ClM436N6 pic.twitter.com/mJP7qpGEv1— Posty (@PostyXBT) September 21, 2022These speculations echo general rate hike expectations. John Kicklighter, the chief strategist at DailyFX, notes that a 50 bps rate hike would be bullish for the U.S. benchmark stock market index.Nonetheless, a 100 bps rate hike would be extremely bearish for the S&P 500. This could be equally problematic for Bitcoin, whose correlation with stocks has been consistently positive since December 2021.FOMC policy decision scenarios for DXY and SPX. Source: John Kicklighter/DailyFXPolls expect a 75 bps rate hikeThe U.S. economy suffered two back-to-back quarters of negative growth. Moreover, its manufacturing PMI pointed to the slowest growth in factory activity since July 2020. Meanwhile, the 2-year U.S.Treasury returns have crossed above the 10-year U.S. Treasury returns, plotting a yield curve.Related: What’s next for Bitcoin and the crypto market now that the Ethereum Merge is over?These metrics raise the alarm about an impending recession. But offsetting those are unemployment data at its record low and housing starter rates still above their danger zone of $1.35 million, according to data presented by Charles Edwards, founder of Capriole Investments.Total new privately-owned housing units started. Source: FREDNormally, recession warnings prompt the Fed to pivot. In other words, to scale back or pause hiking rates. But Edwards notes that the central bank will not pivot since the U.S. economy is technically not in recession.”Until major concerns of recession show up, until it hurts where it counts — employment — there is no reason to expect an urgent change in Fed policy here,” he wrote, adding: “So it is business as usual until we have evidence that inflation is under control.”Most economists, or 44 of the 72 polled by Reuters, also predict that Fed would raise rates by 75 bps in their September meeting. Therefore, Bitcoin could avoid a deeper correction if it maintains its correlation with the S&P 500, based on Kicklighter’s outlook.Bitcoin to $14K next?From a technical perspective, Bitcoin could drop to $14,000 in 2022 if a drop below its current support level of around $18,800 triggers a “head-and-shoulders” breakdown.BTC/USD daily price chart featuring head-and-shoulder breakdown setup. Source: TradingViewConversely, a rebound from the $18,800-support could have BTC’s price eye $22,500 as its interim upside target, or a 16.5% rise from today’s priceThe views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.