At the time of writing this article, the king of cryptocurrencies is at $29,980 and has reached its lowest level of the day. So what is the reason for the decline in cryptocurrencies? The markets, which breathed a sigh of relief with the recent XRP announcement, are now turning red again. What are the short-term expectations? Will the decline in Bitcoin and altcoins continue?
Despite the ongoing accumulation trend among investors, the price is falling. The critical level for Bitcoin is the $30,400 region, and closing below this level makes it easier for bears. Although it has not fallen significantly below the $30,000 region for now, BTC reached its lowest level of the day at $29,920. At the time of writing this article, the Bitcoin price was struggling to rise above $30,000.
There is no clear reason behind the decline. However, there is about a week left until the Fed meeting scheduled at the end of the month. A 25bp increase and a hawkish stance are expected at this meeting. Although inflation continues to decline due to the base effect, it is not at the desired level. Moreover, the relaxation on the employment front has not started as expected. According to the Fed’s estimates, it will be difficult for inflation to decrease at the desired pace and level without an increase in the unemployment rate.
Bitcoin Comment
As we have mentioned before, the price has been trading in a narrow range for about a month. The price had tested the bottom of the channel several times and revisited the top. Now we see that a new bottom test is ongoing. A daily close below $29,700 or above $31,500 is needed for a major move.
After the news from BlackRock, the price gained approximately 27% at the top and has been fluctuating between $31,500 and $29,700 since June 21. If it can make closings above $31,500, $34,000 is possible in the short term. However, the current outlook suggests that if $29,700 fails and the bulls are unsuccessful, the price could visit the $28,800 levels.
In the scenario where short-term upward movement does not begin, the pressure from the Fed may increase further, so the coming days may continue to be red. Investors should not forget that when the support test begins for BTC, altcoins may experience faster losses.
