After a tiring month of July, we will leave behind approximately 40 hours. Prices have been quite frustrating for the past few weeks. July was especially boring because the king of cryptocurrencies, Bitcoin, lost $30,000, in addition to the busy agenda in June. Moreover, the prolonged period of sideways movement indicates that a breakout is imminent.
Why Aren’t Cryptocurrencies Rising?
The 25-basis point interest rate hike by the Federal Reserve on July 26th and the subsequent statements made by Fed Chairman Jerome Powell did not disrupt the shallow volatility. This situation is not surprising, as everything happened as expected and was already priced in.
Cryptocurrency markets continued their lackluster performance after the US Personal Consumption Expenditures (PCE) Index came out lower than analysts’ expectations on July 28th. PCE is the inflation measure preferred by the Fed, so it is closely monitored by market observers. In an environment where even the low data could not increase volatility, volumes continue to decline.
A significant portion of altcoins is also following the footsteps of BTC. The lack of interest in the market and the possibility of another 25 basis point increase are now exerting the strongest pressure on the cryptocurrency. Perhaps we may not see a significant price movement until the Jackson Hole Symposium on July 24-26. Last year, this meeting sent clear signals about the medium-term outlook.
What Will Happen to Bitcoin (BTC)?
Bitcoin’s bounce from the 50-day simple moving average (29,250 dollars) is fading near the vicinity of the 20-day exponential moving average (29,743 dollars), indicating that sellers are pulling back at higher levels. The inability to sustain above $29,500 and $29,700 is causing negative performance in altcoins as well.
The 20-day EMA has started to turn downward, and the relative strength index (RSI) is in the negative zone, indicating that bears have a slight advantage. If bears manage to pull the price below the critical support level of $28,861, we might see a downward movement towards $27,500 and $26,000. The downside scenario will continue to frustrate the range between $24,800 and $31,000 for a while.
The main target for the king cryptocurrency should be the 20EMA at $29,743, and if bulls can surpass this level, there might be a bounce towards $32,400 again.
In conclusion, the short-term outlook is negative, and the search for direction may continue until the meeting on August 24-26.
