The selling pressure that caused the Bitcoin price to fall below $30,000 seems to be gaining momentum. The largest cryptocurrency momentarily fell below the support of $29,000, retreating to as low as $28,897, the lowest level seen in recent days, before returning above $29,000.
Bitcoin Price in Search of Direction
The Bitcoin price regained the $29,000 support and is now facing resistance at the 50-day Exponential Moving Average (EMA) (red) equivalent to $29,362. The appearance of the Moving Average Convergence Divergence (MACD) indicator suggests that the path of least resistance in front of the price is upward.
It is difficult to expect Bitcoin to recover immediately from the region between $29,000 and $30,000, and the primary factor adding confidence to the bearish outlook is the Relative Strength Index (RSI) rapidly falling from the neutral region towards the oversold region.
In the coming days, if the decline continues and the price remains permanently below $29,000, it could result in a retreat towards $28,000 and $25,000. Depending on how investors react to the critical Fed interest decision on July 26, a further drop in the BTC price or a rebound above $30,000 can be expected.
Investors need to closely follow the 100-day EMA (blue) in addition to the support at the levels of $29,000, $28,000, and $25,000 because this level could help prevent the downward trend from intensifying.
Bitcoin’s Outlook Ahead of the Fed Interest Decision
Along with all this, investors may begin to exercise caution while awaiting the US Federal Reserve‘s interest decision, causing the trading range to narrow. A decision to increase the interest rate by 25 basis points is expected to emerge from today’s and tomorrow’s meetings of the Federal Open Market Committee (FOMC) where the Fed’s monetary policy is assessed. The CME FedWatch Tool shows a 98 percent chance of the Fed raising the interest rate by 25 basis points. With a 25 basis point increase, the policy rate in the US will rise to a range of 525 to 550 basis points, the highest level in the last 17 years.
Although the Fed paused interest rate hikes in June, investor sentiment rapidly declined due to subsequent statements implying more rate hikes. A new rate hike could cause investor sentiment to decrease further and worsen the already poor investor sentiment in the cryptocurrency market.
Edward Moya, a senior market analyst at the FX market Oanda, said in an investor note published on July 24 that Bitcoin investors need a new catalyst to regain their enthusiasm. Therefore, in addition to the FOMC meeting, investors will be awaiting the Consumer Confidence Index (CCI) to be announced by the Conference Board today. In this context, in addition to the Unemployment Claims data to be announced on July 27, the Personal Consumption Expenditures (PCE) data to be announced on July 28 will also be closely watched.
Beyond economic indicators, on-chain analysis company CryptoQuant reported that the Bitcoin network’s mining hashrate is experiencing stagnation, but this could be temporary. A higher hashrate shows that the Bitcoin network is highly secure and that BTC’s intrinsic value is increasing. CryptoQuant also added that investors should not worry about miners moving their money to cryptocurrency exchanges, as this often happens, and the price usually tends to recover with increased buying pressure during price adjustments.
