The Bitcoin market has experienced a slight uptick in the past 24 hours as bulls managed to defend critical support. With a 2% profit in the past day, Bitcoin currently trades at $29,400. While the cryptocurrency has recorded similar profits over the past week, the rest of the market has been facing stalls or losses. However, despite these positive movements, recent data suggests that Bitcoin’s price action may continue to be sideways.
One of the key factors influencing the Bitcoin price over the past two years has been the tension surrounding the U.S. Federal Reserve (Fed) and its interest rates hike program. As the financial institution enters a quiet period due to summer vacations, crypto analysis firm Blofin predicts that Bitcoin and the crypto market will likely stay within their current range until September. During this time, the overall price movements and volatility spikes are expected to decline due to the low liquidity environment and institutions hedging their positions.
According to Blofin, the current macroeconomic landscape, driven by inflation and the interest rates hike program, could persist until May 2023. This means that sideways price action may continue until that period, or until the U.S. Fed decides to cut interest rates, which would pave the way for more risk appetite across the sector. The report suggests that potential interest rate hikes are already somewhat priced in and may not be efficient in pushing BTC above the critical resistance level of $30,000.
The lack of liquidity in the market has led to a decrease in investors’ interest in trading. As a result, most investors are currently sitting on the sidelines. Monthly trading volume across crypto exchanges has been declining since July 2022, reflecting this lack of interest in cryptocurrencies. Additionally, BTC has been experiencing intraday price movements of only around 0.1%, which is a first for the cryptocurrency over such an extended period.
Due to the lack of strength around Bitcoin and Ethereum (ETH), Blofin believes that prices are likely to see a dip. When the price of BTC is around $30,000 and the price of ETH is around $2,000, both cryptocurrencies are expected to lose their upward momentum and hover for a while before falling further. The report notes that although there may be short or long periods where both levels are hit, significant price breakouts have not occurred.
The Bitcoin market is currently experiencing a sideways journey with its price being influenced by macroeconomic factors such as the U.S. Federal Reserve’s interest rates hike program. While there has been a slight uptick in price recently, the overall trend suggests that Bitcoin may continue to trade in a range until at least September. The lack of trading interest and decreasing liquidity further contribute to the potential for a stagnant period. As the market dynamics evolve and the U.S. Fed’s decisions impact the sector, investors will be closely watching for any signs of a breakout or a sustained change in price direction.
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