BTC Price Analysis: Selling Pressure Resumes Post-Fed Rate Decision

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As a seasoned analyst with over two decades of market experience under my belt, I’ve seen my fair share of economic cycles and bullish rides. This latest announcement by the Fed, maintaining rates steady yet again, feels like deja vu from the early 2000s. It’s a calculated move that aims to strike a balance between combating inflation and bolstering investor confidence.

As a researcher, I noted on Wednesday that the price of Bitcoin exhibited reduced volatility following the U.S. Federal Reserve’s announcement of its fifth interest rate decision. During Jerome Powell’s speech, no substantial shift was detected, but a minor dip persisted, likely due to the ongoing bearish sentiment in the market.

Fed Holds Rates Steady in July 2024

On July 31, 2024, the U.S. Federal Reserve announced its decision regarding interest rates, which came after a two-day gathering of the Federal Open Market Committee (FOMC). In this meeting, the central bank opted to keep the federal funds rate within a range of 5.25% to 5.50%, as anticipated by the market. This is the seventh consecutive time rates have remained unchanged following a series of steep increases that started in March 2022, aimed at addressing inflation.

Maintaining interest rates unchanged could boost investor trust, since this suggests a cautious approach to the existing economic climate instead of an abrupt change in monetary strategy, as implied in the FOMC statement.

The Committee aims to reach peak job availability and maintain a 2% rate of inflation in the long term. The Committee believes that the risks associated with meeting these employment and inflation objectives are becoming more evenly balanced. The future economic situation remains uncertain, and the Committee is mindful of potential threats to both aspects of its twofold responsibility.

Wedge Pattern Indicates Potential BTC Price Drop

As an analyst, I observed that during Federal Reserve Chair Jerome Powell’s speech on Wednesday, the price of Bitcoin held steady around my personal benchmark figure of $66,000. However, it didn’t take long for supply pressure to resurface within the crypto market, causing a decline of over 2% in Bitcoin’s value to $64,750. This shift resulted in a decrease in Bitcoin’s market capitalization to roughly $1.278 trillion.

As someone who has closely followed the cryptocurrency market for several years now, I must say that the recent decline in Bitcoin (BTC) is a notable reversal that caught my attention. This downward trend can be seen clearly on its daily chart at the resistance line of a broadening wedge pattern. Having observed similar patterns before, I know that this setup, characterized by diverging trendlines governing its consolidation trend in recent months, often signals a significant change in direction for BTC’s price movement. While it is always important to approach any investment with caution, the knowledge gained from past market trends and patterns can provide valuable insights into potential future developments.

Previously, when this pattern’s resistance was broken in reverse, it often resulted in substantial drops that touched the lowest points. The Moving Average Convergence Divergence (MACD) is approaching a bearish cross-over, indicating that the downward price correction might extend due to increased selling pressure. If the selling persists, the projected Bitcoin prices could fall to $63,370 and then possibly to $60,000.

BTC Price Analysis: Selling Pressure Resumes Post-Fed Rate Decision

As a crypto investor, I’m keeping a close eye on the 50 and 100 day Exponential Moving Averages (EMAs) hovering around $63,370. These averages might serve as a solid foundation, preventing any potential further decline in the market. However, if this anticipated reversal doesn’t materialize, it could lead to a breakout from the wedge pattern, allowing Bitcoin to surpass its previous peak of $73,680.

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2024-08-01 00:07