Bitcoin (Bitcoin) Prices continued to fall on Wednesday before the Federal Reserve Chairman Jerome Powell testified.
After losing 3.46% during the session, the spot BTC/USD exchange rate fell to a 17-day low of 31,600 US dollars. At the same time, CME futures linked to the currency pair plummeted 3.41% to $31,515, extending the week-to-date decline to 9.5%.
Bitcoin had risen to $35,000 in early July, as the bulls continued to defend the support level of around $30,000 to withstand each downside attempt.
Independent Market Analyst Will Clemente III famous Entities with low sales history continue to absorb Bitcoin from speculative traders at a lower level, adding that the strategy is effectively removing good BTC supply from the market.
Clement wrote: “Given that there was no surrender, in my humble opinion, the re-accumulation process will be completed’when’ rather than’if’.”
“Once the process is complete, the market will experience a supply shock.”
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Bitcoin Sold for $35,000 It fell to nearly $31,500 during the trading session on Wednesday. One factor that keeps traders cautious is how the Fed will respond to the uncertainty of rising inflation — now at the fastest rate in 13 years.
In detail, the US Consumer Price Index (CPI) Increase of 0.9% in June 2021 Compared with the previous month, it is an increase of 5.4% compared with June 2020. The higher inflation data made people pay more attention to Powell’s appearance on the House of Representatives Financial Services Committee at 9:30 am Eastern Time on Tuesday.
The central bank governor wants to clarify his position on the continuing surge in consumer-related inflation. In an earlier statement, Powell suggested that the Fed should proceed with caution unless it sees a “maximum recovery” in the US labor market.
Therefore, with the support of some like-minded and moderate Fed officials, including New York branch president John Williams, Powell may neglect to cut the Fed’s $120 billion monthly asset purchase program after strong growth and high inflation in the United States.
The Fed’s hawkish tone coincides with a lower Bitcoin price
At the same time, Evercore ISI economist Peter Williams prediction Rising CPI readings will exacerbate tensions among members of the Federal Open Market Committee.
He pointed out that some hawks may ask for scale reduction as early as September, but added that the Fed will generally adopt a wait-and-see attitude, believing that inflation is temporary in nature.
As for Bitcoin, the outlook remains mixed, especially in recent months that cryptocurrencies have failed to respond to inflation warnings, China’s crackdown on the crypto industry, increasingly stringent regulatory reviews, the Fed’s 2023 interest rate hike plan, and Elon Musk’s After de-encrypting the tweet.
wealth Report Bitcoin is advancing “on its own drummer,” ignoring the recent surge in key inflation indicators. This makes cryptocurrencies a dubious hedge against rising consumer prices.
However, Joel Kruger, a foreign exchange strategist at the London investment company LMAX, has a different view. The analyst pointed out that Bitcoin’s long-term outlook is still biased towards the upside because of “legitimate fear of rising inflation.”
“Some investors see Bitcoin as a risk-related emerging asset, which is more frustrated,” he said Tweet Tuesday night.
“If the stock market crashes, there may be more downside in the short term. But in the end, Bitcoin should be well supported in the long-term value proposition.”
In addition, Greg Waisman, co-founder and chief operating officer of the cryptocurrency infrastructure company Mercuryo, offered a more critical view.
First, he pointed out that even when inflation is rising, macro investors do not believe in the true value of Bitcoin. Second, he projected the ether (Ethereum) As a better cryptocurrency, given its recent rise in Bitcoin.
“Bitcoin is the most expensive and most famous cryptocurrency, but it is not the current cryptocurrency,” Weisman explained, adding:
“Ethereum is the true king of cryptocurrencies. Investors will continue to overestimate Bitcoin and sell it when it is convenient. In other words, Bitcoin will once again exceed the $50,000 mark.”
Technology Outlook
Currently, the low trading volume and the two-month downtrend continue to put Bitcoin in a bearish state.
Since May 20th, the BTC/USD exchange rate has been falling in a parallel downward channel, rebounding from the support trend line and falling back after testing resistance. At the same time, the USD 30,000-32,000 area has been providing additional support.
After recently retesting the upper trend line of the channel, the currency pair seems to be returning to the lower trend line. However, the short target under the current circumstances is less than $30,000 (close to the bottom of the second quarter of $28,732).
Conversely, a break north of the channel resistance trend line may allow BTC/USD to test the 50-day simple moving average (50-day SMA; blue wave) as the next upside target of $35,363. There has been a sell-off in the region in recent trading days.
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