Bitcoin (BTC), the world’s leading cryptocurrency, declined substantially, reaching a low of $24,820 during early Asian trading on Thursday. This significant drop brings Bitcoin to its lowest level in approximately three months, since March 16.
Bitcoin Price Plunges Further Post Fed Decision, $24K Next?
Bitcoin price started a fresh decline below the $25,500 support. BTC is now at a risk of more losses toward the $24,000 support zone.
Bitcoin is gaining bearish momentum below the $25,500 support. pic.twitter.com/h4Rg29blwb
— Christopher (@Chris09689) June 15, 2023
The decline in Bitcoin’s value can be attributed to several factors, including the US Federal Reserve’s hawkish stance, the strength of the US dollar, and the overall bearish sentiment in the cryptocurrency market. These combined factors have exerted downward pressure on Bitcoin’s price.
Investors will closely observe forthcoming developments in central bank policies, the global economic recovery, and regulatory changes to assess the future direction of Bitcoin and the wider cryptocurrency market.
Federal Reserve’s Hawkish Stance and Crypto Markets
It is worth recalling that the recent announcement by the Federal Reserve to maintain a hawkish stance has affected financial markets, including cryptocurrency. Although the decision to keep interest rates unchanged was anticipated, the indication of potential future rate hikes has raised concerns among investors.
The Federal Reserve kept interest rates unchanged but signaled in new economic projections that borrowing costs will likely rise by another half of a percentage point by the end of this year https://t.co/RcqxIvs5E3 pic.twitter.com/6w30c5NYz5
— Reuters (@Reuters) June 15, 2023
In their announcement, the US central bank mentioned that they plan to pause interest rate hikes for now, but they also projected two future rates hike.
This means they expect interest rates to eventually reach 5.6%, higher than their previous forecast in March.
However, the Federal Reserve has clarified that its future rate decisions will be based on upcoming economic data. This places significant importance on key indicators such as retail sales, import and export prices, manufacturing indexes, business inventories, and industrial production.
These data points will provide valuable insights into how consumers navigate the challenges posed by high prices and interest rate increases.
US Dollar Strength and Bitcoin’s Decline: Factors at Play
On the other side, the strength of the US dollar has played a crucial role in undermining Bitcoin’s value. The Federal Reserve’s hawkish stance and expectations of a solid economic recovery have bolstered the US dollar’s appeal among investors.
— Reuters (@Reuters) June 14, 2023
This is why more people have been investing in the US dollar instead of riskier assets such as cryptocurrencies. This has caused the value of Bitcoin to go down even further because there is less demand for it.
Bitcoin Price Prediction
On the technical front, when we examine the 4-hour timeframe, Bitcoin has experienced a significant drop and found support around the $24,750 level. The formation of a hammer candlestick followed by three black crows suggests that the bearish sentiment is weakening as sellers become exhausted. Additionally, the appearance of an engulfing bullish candlestick pattern indicates that buyers are gaining control.
Looking at the broader timeframe, Bitcoin has already completed a 23.6% retracement around the $25,150 level, and a break above this level could potentially expose BTC to the 38.2% retracement level at around $25,400.
Breaking above the $25,450 level could lead to further resistance at $25,580 or $25,800, corresponding to the 50% and 61.8% Fibonacci retracement levels. It is crucial to monitor the $25,450 level as it coincides with the 50-day exponential moving average and has previously acted as both support and resistance for Bitcoin.
On the downside, there is initial support around the $24,750 level, and a break below this level could push the BTC price toward the next support level at $24,285 or the psychological level of $24,000.
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