In the middle of a rough week for crypto markets, Bitcoin has been under pressure, trying to pick pace. At the press time, the OG-crypto currency is trading at $65,621.49, being down 1.7% as compared to the same time last day. Investors now worry that Bitcoin will fall below its support level of 65K-66K in the upcoming trading days.
Bitcoin Price Hovers Around Support Price
Bitcoin prices have been trading very close to the support price of $65,000-$66,000 for the day. Investors are now concerned if the price can fall below this essential level, highlighting dampened trading and loss of risk appetite.
The week has seen a decline in the price of Bitcoin, even though the $66,000 mark continues to provide a lot of support. According to CoinMarketCap data, BTC is down 7.8% this week. It is safe to say that BTC could drop to the $60,000 mark if the dampened trading continues. Additionally, since the $60,000 level has historically provided a great deal of support, many individuals will be paying close attention to this area. Analysts at present expect a lot of back and forth in the market going forward as traders attempt to process a 92% gain that occurred only six weeks earlier.
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The $68K resistance level is difficult for Bitcoin to breach as market activity significantly declines. The cryptocurrency market has been trending sideways over the past few days, compounding the large losses from earlier in the week.
Why Is Bitcoin Trading Down?
This week, significant events unfolded in the global economic markets. As reported by Bankless Times, the US annual inflation rate, a key economic indicator, experienced a slight dip from 3.4% in April to 3.3% in May of 2024. This figure, which was slightly lower than the average analyst expectation of 3.4%, suggests a potential shift in the economic landscape. The Consumer Price Index (CPI) also remained unchanged from the previous month, falling short of the projected 0.1% increase.
This is because declining gas prices are compensated by growing housing costs. The good news is that many markets responded favorably to the CPI statistics, suggesting that the Fed’s strategy of reducing inflation may be effective.
At its June meeting, the US Federal Reserve made a significant decision to maintain the same levels of its key interest rates. This decision, coupled with the Fed’s forecast of a single rate reduction this year, has implications for the financial markets. The forecast of a single rate reduction is a departure from the previously projected three rate cuts in 2024, which could potentially impact the market dynamics.
Investors have always given the Federal Reserve’s rate choices and inflation figures a lot of weight when evaluating assets. When interest rates are lower, government securities typically lose value, which increases the appeal of virtual assets like Bitcoin.
Despite the strong market momentum, Bitcoin is having difficulty recovering after the FOMC decision because miners are experiencing post-halving despair. SEC chain Garry Gensler predicts that the approval of the spot ETH ETF will occur in late summer, meaning that we will have a calm summer till the approval arrives with decreased volatility and no catalyst to move the market in any direction.
