Bitcoin price sell-off below $30,000 seems to be gaining momentum such that the largest crypto briefly lost ground at $29,000 and traded lows of $28,897 before rebounding to exchange hands at $29,115.
Bitcoin Price Reclaims $29k Support – What’s Next?
Bitcoin price has reclaimed support at $29,000 but there is no guarantee an uptrend will carry on, especially with the resistance anticipated at the 50-day Exponential Moving Average (EMA) (red) holding at $29,362.
Based on the Moving Average Convergence Divergence (MACD) indicator’s outlook, the path with the least resistance is generally to the upside. Shorts traders look out for bearish crosses, characterized by the MACD line in blue crossing below the signal line in red.
It might be pointless to hope for an immediate recovery from Bitcoin price ranging momentum between the area around $29,000 and $30,000. Adding credence to the bearish outlook is the Relative Strength Index (RSI), which is dropping fast in the neutral region toward the oversold region.
If declines are sustained below $29,000 in the coming sessions, traders may want to capitalize on the potential profitable shorts position to $28,000 and $25,000. Depending on how investors react to the decision on interest rate hikes this week, Bitcoin price might continue with the breakdown, or start gaining ground above $30,000.
In addition to support at $29,000, $28,000, and $25,000 traders may want to closely watch the 100-day EMA (blue), as it may help arrest the bearish situation before it intensifies.
Bitcoin Price Technical Outlook Ahead of FOMC Meeting
Investors have continued to tread cautiously, with the trading range narrowing, possibly due to the impending rate hike by the US Federal Reserve. As earlier reported, the Federal Open Market Committee (FOMC), which deliberates the regulator’s monetary policy is expected to meet Tuesday amid a high probability of a 25 basis point rate hike as well as the reality of inflation risking economic stability.
In a related report, CoinDesk cited the CME Rate Watch currently foresees a 98% chance of a 0.25% increase in interest rate. Such a decision would push the fed funds rate in the range between 525 to 550 basis points – this is the highest level in approximately 17 years.
Although the Fed paused interest rate hikes in June, investor sentiment quickly faded due to the remarks that followed insinuating further rate hikes.
Another rate hike would squash investor sentiment even further, worsening an already dilapidated situation in the crypto market.
For Bitcoin traders to regain enthusiasm, a new driving factor is required, Edward Moya, a senior market analyst at the foreign exchange market creator, Oanda, said in a note published on Monday.
In addition to the FOMC meeting, investors are looking forward Consumer Confidence Index (CCI), which will be released by the Conference Board on Tuesday. The week is set to get busier with the release of reports on jobless claims on Thursday in addition to the personal Consumption Expenditures (PCE) on Friday.
Away from economic indicators, on-chain analytics firm CryptoQuant reveals that the Bitcoin mining hashrate is experiencing stagnation, though this might be temporary.
It is worth mentioning that “a higher hashrate means that the Bitcoin network is more secure, which in turn means that the intrinsic value of BTC has increased.”
1/ On July 8, #Bitcoin hashrate reached an all-time high and then stagnated. Additionally, as the price increase stalled and the possibility of a correction increased, miners expressed concerns about a price drop as they cashed out their mined Bitcoin. pic.twitter.com/I1V4Prlsci
— CryptoQuant.com (@cryptoquant_com) July 25, 2023
CryptoQuant adds that investors should not be alarmed by miners cashing out as this happens frequently “and the price has often recovered as the buying pressure increases during price adjustments.”
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.