Bitcoin price could drop further in the coming weeks after several rejections around $70K, coupled with bearish divergence on the weekly RSI.
The total crypto market cap dropped more than 3 percent in the last 24 hours to hover around $2.41 trillion, led by Bitcoin (BTC). Bitcoin price closed last month in a dragonfly doji candlestick, signaling fading bullish momentum. According to crypto data provided through TradingView, Bitcoin price slipped more than 3 percent in the past 24 hours to reach a daily low of about $63,572.
Consequently, more than $225 million was liquidated from the crypto derivatives market, mostly involving long traders.
Bitcoin Price Reacts to FOMC Data
The sudden Bitcoin price drop in the past 24 hours is in reaction to the high-impact news from the Bank of Japan (BoJ) and the Federal Reserve. On Wednesday, the BoJ increased its benchmark interest rate by 0.15 bps to 0.25 percent, whereas the analysts anticipated a hold at 0.10 percent.
Later during the day, the Federal Reserve maintained its benchmark interest rate at 5.50 percent, just as expected.
According to the Fed, the US inflation has eased in the past year but remains elevated to initiate a rate cut. Nonetheless, Fed Chair Jerome Powell said that an interest rate cut could happen as soon as September if the inflation continues to slow down.
“In recent months, there has been some further progress toward the Committee’s 2 percent inflation objective. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance,” the report noted.
Spot BTC ETF Update
The Grayscale’s Mini BTC ETF launched on Wednesday and received $1.8 billion worth of Bitcoins through Coinbase Prime from GBTC. According to the latest market data, BlackRock’s IBIT registered a net cash inflow of about $21 million on Wednesday, thus a total of $22.58 billion in net holdings.
Meanwhile, Fidelity’s FBTC registered a net cash outflow of nearly $32 million, while ARKB reported a net cash outflow of about $4.61 million on Wednesday.
What’s Next?
Bitcoin price has been forming a reversal pattern in the past four months, characterized by a triple top and bearish divergence on the weekly time frame. According to veteran trader Peter Brandt, Bitcoin price has also formed lower lows and lower highs in the past few months, thus confirming a falling trend.
The series of lower highs and lower lows continues $BTC pic.twitter.com/T4vfCID0Mf
— Peter Brandt (@PeterLBrandt) July 31, 2024
Despite the increased fear of further Bitcoin capitulation in August, on-chain data shows long-term buyers remain focused on the ultimate parabolic rally ahead.
From a technical standpoint, Bitcoin price could drop as much as $52k in the coming weeks if the support range between $60k and $61k fails to yield positive results.
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