- Bitcoin has been attempting recovery today following a sharp decline about 48 hours ago.
- The bitcoin market possibly reacted to a WSJ report which triggered FUD about Binance.
- Are markets readying for the FOMC announcement?
Bitcoin’s recovery trial after sharp dive
Bitcoin has slightly gained a foot, recording a 0.46% price upsurge, rising from $29.130k to $29.273. The charts suggest that the markets could be poised for a short rally. However, the picture has been quite different in the past 48 hours.
BTCUSD chart. Source: Tradingview
The bitcoin market has been red for nearly 48 hours after recording a sharp decline on the 25th. After testing and retesting its short-term $29.679k support level, Bitcoin broke out, dropping to $28.983k.
Some traders argue that $29.5k is the most plausible retake range. Despite its strong footing in recent hours, Bitcoin will still face stiff resistance at $29.5k, $30k and $30.9k. On the downside, Bitcoin’s support levels are $28.572k and $27.997k.
Reacting to Binance FUD?
Before Bitcoin’s sharp price decline, WSJ released a news article saying, “some Binance US Crypto Trading was a mirage.” The allegations surfaced in the SEC case.
Bitcoin’s sharp decline directly coincided with the time the article was posted, implying that this FUD fueled the price plunge. Of course, the FUD offers a plausible explanation for the recent market trend.
Is Bitcoin readying for Fed announcement?
After Bitcoin’s sharp decline, some market analysts asserted that the markets are readying the FOMC announcement in the next hours. The general sentiment is that FOMC will announce massive rate hikes of 25 bps, sending US interest rates to the 5.25%-5.5% range.
After 10 consecutive rate hikes ranging from 25 to 50 bps, the Fed slowed down in June. However, analysts at Morgan Stanley note that the slowing jobs and inflation rise could trigger the FOMC to extend their hikes before making any rate cuts in Q1, 2024. The ongoing economic performance warrants a rate hike.
Several Fed watch tools, including investing.com and cmegroup.com, all point towards possible rate hikes. Based on investing.com, the probability of rate hikes is about 98.3%.
Other major economic activities later this week include the GDP report and initial jobless claims.
Despite the many activities, the crypto markets remain neutral as the Fear and Greed Index now stands at 52.