Bitcoin (BTC) continued its downward trend at the opening of Wall Street on August 1, as the cryptocurrency ignored new interest rate cuts from central banks.
Dovish Federal Reserve Provides No Respite for Bitcoin Bulls
According to data from Cointelegraph Markets Pro and TradingView, the BTC price is in a bearish trend after dropping 2.4% the previous day.
The decline continued despite the Federal Reserve adopting a dovish stance in its recent meeting when it decided to change interest rates.
In a press conference after the Federal Open Market Committee (FOMC) decided to keep interest rates steady, Federal Reserve Chairman Jerome Powell hinted at a possible rate cut at their next meeting in September.
“We do not anticipate that it would be appropriate to lower the target range for the federal funds rate until we have greater confidence that inflation is on a sustainable path toward 2 percent,” he said in a prepared statement.
“The second quarter inflation numbers have added to our confidence, and further good data will further strengthen that confidence. We will continue to make decisions as we meet.”
According to CME Group’s FedWatch tool, markets, which had already priced in a 100% chance of a September cut, now expect the final cut to be a quarter of a percent.
While US stocks reacted favorably to the event, cryptocurrencies showed little interest, with BTC/USD hitting a local low of $63,400, the lowest since July 19.
“The mental illness continues. Historically, liquidity sweeps fail when they are in the lead forever,” popular trader Crypto Chase summed up to his X followers that day.
“No strong read here, but I think anything from mid-61s to 59s is possible. Bidding simply depends on how aggressive/confident you are. Accepting anything below 59s is a bad look.”
Meanwhile, another trader, CrypNuevo, sees the potential for a short squeeze near current levels.
He predicted such an event could happen before the weekend, noting that most liquidation levels are above, rather than below, the spot price.
Cryptocurrency Markets “On High”
Trading firm QCP Capital says inflows into a newly launched US spot Ether exchange-traded fund (ETF) could provide a short-term outlook on cryptocurrency market sentiment.
Related: Bitcoin Whales Drive ‘Unprecedented’ $23 Billion Buying Frenzy in July – New Data
“Unfortunately, the stock rally was not felt in crypto, which experienced a broad sell-off overnight and into this morning,” he wrote in a recent post to subscribers of his Telegram channel.
“Markets remain tense as traders watch for daily ETH ETF outflows and additional supply pressures from Mt Gox and the US government.”
QCP continues to argue that the US presidential candidates will play a key role in cryptocurrencies, stating that the market is “likely to be range-bound until the next catalyst appears.”
“In the long term, the discussion among U.S. presidential candidates and senators about a sovereign Bitcoin reserve, and the possibility that other countries will follow suit, could fundamentally change the cryptocurrency landscape,” he continued.
“A US or national ‘put’ on the BTC price could have significant implications, potentially making accumulation a strategic investment approach on the downside.”
This article does not contain any investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making decisions.