Key Points
- Bitcoin’s price dips below $64K due to FOMC data, indicating potential further weakness.
- Crypto market cap drops over 3%, with Bitcoin leading the decline.
The total cryptocurrency market capitalization has seen a decline of more than 3% in the last day, settling around $2.41 trillion. This decrease was spearheaded by Bitcoin (BTC).
Bitcoin’s price concluded the previous month with a dragonfly doji candlestick, which is often interpreted as a sign of waning bullish momentum. Data from TradingView shows that Bitcoin’s price has fallen by over 3% in the last day, hitting a daily low of approximately $63,572.
Bitcoin’s Reaction to FOMC Data
This sudden drop in Bitcoin’s price is a response to significant news from the Bank of Japan (BoJ) and the Federal Reserve. The BoJ raised its benchmark interest rate by 0.15 bps to 0.25 percent, an unexpected move as analysts predicted a hold at 0.10 percent.
Later in the day, the Federal Reserve kept its benchmark interest rate at 5.50 percent, which was in line with expectations. The Fed has stated that while US inflation has slowed down in the past year, it remains high enough to warrant a rate cut. Fed Chair Jerome Powell indicated that an interest rate cut could occur as soon as September if inflation continues to slow.
Update on Spot BTC ETF
Grayscale’s Mini BTC ETF launched recently and received $1.8 billion worth of Bitcoins through Coinbase Prime from GBTC. Current market data shows that BlackRock’s IBIT registered a net cash inflow of about $21 million on Wednesday, resulting in total net holdings of $22.58 billion.
In contrast, Fidelity’s FBTC reported a net cash outflow of nearly $32 million, while ARKB noted a net cash outflow of about $4.61 million on the same day.
Future Predictions
Bitcoin’s price has been showing signs of reversal in the past four months, characterized by a triple top and bearish divergence on the weekly time frame. Experienced trader Peter Brandt has noted that Bitcoin’s price has formed lower lows and lower highs in recent months, which confirms a downward trend.
Despite the growing fear of further Bitcoin capitulation in August, on-chain data suggests that long-term buyers are still focusing on the ultimate parabolic rally ahead. Technically speaking, Bitcoin’s price could fall to as low as $52k in the upcoming weeks if the support range between $60k and $61k fails to hold.