After a day of high volatility in the markets, bitcoin (BTC) has fallen to 67,000 dollars (USD), generating new perspectives on its future.
As reported by CriptoNoticias, a lower-than-expected consumer price index (CPI) in the United States momentarily pushed risk markets higher yesterday. But, later, the decision of the FOMC, the body of the Federal Reserve (Fed) that defines US monetary policy, led to price declines.
The Fed yesterday projected a single interest rate cut for 2024. This is below its March forecast that anticipated three reductions, as well as the market that anticipated two cuts. In addition, Jerome Powell, president of the organization, pointed out that the drop will depend on inflation continuing to decline, which they do not yet see as guaranteed.
“Powell’s speech is not at all optimistic,” commented the trader known as The wolf of few streets. He argued that, because of this, offsets the previous positive impact of the CPIwhich generated market confidence, as reflected by the volatility of the bitcoin price.
Analyst Michaël van de Poppe summarized that “the Fed and the CPI generated mixed signals.” However, he noted that Treasury yields and the dollar index (DXY) have been falling substantially. Therefore, in the midst of lower inflation, expect bitcoin and cryptocurrencies to gain momentum.
Furthermore, the analyst noted that “bitcoin still maintains a crucial level of support.” As shown in the chart, it is located in a price zone that has functioned as a floor during the last month and resistance. previously. In this way, it can result as a psychological level where demand increases.
Bitcoin shows strength on a technical level
Despite the current setback, bitcoin still shown inside an ascending triangle regarding its technical analysis. As seen below, this figure consists of increasingly higher lows while maintaining the same resistance. In this sense, if this structure is not broken downwards, it is possible to exceed the historical maximum price.
“Drops are for buying,” considered the pseudonymous trader Jelle as long as he follows this ascending triangle structure. Currently, BTC is trading 8% off its all-time high of $73,700 recorded three months ago.
It should also be taken into account that, as the graph indicates, the latest Fed rate decisions led to declines for bitcoin in the vicinity and an increase of around 20% during the following weeks. “Let’s see if yesterday’s FOMC event will lead to a sizable rebound again,” Jelle commented.
According to the trader and YouTuber author of the Crypto Rover channel, If bitcoin loses the current price zone, it will return to USD 60,000. This level has previously functioned as support, during the period of consolidation that the market maintains from the all-time high.
