Bitcoin is currently being traded at a price of 29,464, reflecting a marginal increase of 0.50% on Thursday.
Nonetheless, the digital currency has experienced a significant slump of almost 3% over the past week, following the Federal Reserve’s decision to raise the federal funds rate by 25 basis points.
While the economy is witnessing moderate growth, the central bank’s decision to constrict monetary policy has exerted some downward force on Bitcoin’s price.
Market players, including investors and traders, are keenly observing the market’s response to this rate increase, as it may affect the future performance of the cryptocurrency.
Federal Reserve Raises Federal Funds Rate by 25 Basis Points Despite Moderate Economic Growth
Even though the economy is experiencing moderate growth, the Federal Reserve has recently elevated the federal funds rate by 25 basis points.
This move was anticipated and already factored into the market, with Bitcoin witnessing some recovery the following day.
According to the most recent report from the Federal Open Market Committee (FOMC), the primary purpose of the rate increase was to keep inflation in check.
The Fed chair, Powell, indicated that while a rate alteration in September is feasible, there’s also a possibility of a pause.
As of now, the committee has not reached any conclusions regarding future meetings.
Nevertheless, the cryptocurrency market may face some selling pressure on July 27 due to expectations of the European Central Bank (ECB) raising interest rates by another 25 basis points, despite the official recession status of the Eurozone.
The Central Bank of Japan is also considering a hike in interest rates, which could result in an intense trading day on Friday.
The Federal Reserve’s recent decision to raise the federal funds rate by 25 basis points amid moderate economic growth had a mixed effect on Bitcoin’s value. Although the move was predicted and already priced into the market, Bitcoin did register some recovery on the subsequent day.
Bitcoin Price Prediction
In a technical analysis of Bitcoin, it appears to have found a support level around $28,850, as seen from a series of Doji and spinning top candles closing above this point.
Currently, it’s just below the significant resistance level of $29,500, which is further strengthened by a downward trend line visible on the four-hour chart.
The closure of the recent candle suggests the potential for a minor correction in Bitcoin’s price today.
However, it’s important to note that Bitcoin has already broken through the 50-period exponential moving average (EMA), which had previously been a resistance point around $29,250.
Now, this EMA level is serving as a support, and a closure above this firm support level could indicate the persistence of the bullish trend.
An examination of prominent technical indicators, such as the relative strength index (RSI) and moving average convergence divergence (MACD), indicates that they are residing in the positive territory, suggesting a strong likelihood of the continuation of the bullish trend.
Should Bitcoin break the resistance at the $29,500 mark, the next likely technical resistance could be around the psychologically significant $30,000 mark.
If it climbs beyond this, the subsequent resistance might be near the $30,350 mark. Conversely, should Bitcoin drop below the $28,850 level, the next support could potentially be at the $29,000 mark.
A fall below this level could lead to a further drop towards $28,850.
In summary, the technical analysis presents a cautiously positive outlook for Bitcoin, highlighting certain resistance and support levels to be closely observed under the current market conditions.
