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Bitcoin has taken another hit. The first cryptocurrency by market cap lost around $ 30,000 of support in the upper range and is currently struggling to hold the middle range. At the time of writing, BTC is trading at $ 36,120, with losses across the board.
Bitcoin reacted negatively to the announcements made by Jerome Powell, chairman of the US Federal Reserve, at the FOMC meeting. A major macro event last week was the rise in the US dollar as investors lower their inflation expectations for the coming months.
Commodities such as gold and silver were also affected. In the XAU / USD trading pair, the precious metal fell from the high range of USD 1,800. It is now trading at $ 1,763 with the XAG / USD trading pair showing similar losses.
There is some hope for the cops, however. As an economist Alex Krüger said Through his Twitter account, Jerome Powell is known for causing movements in the markets that cancel each other out:
Look on the pleasant side. Powell tends to crash the FOMC and Pump markets on testimony before Congress. He will testify before Congress on Tuesday.
Jarvis Labs analyst Ben Lilly expects the FED to take steps in the coming weeks to inject dollars into the markets. Thus, the dollar could weaken and Bitcoin could take a break. The analyst said:
The US government probably doesn’t want a strong dollar if unemployment is higher than it wants. This is because a cheaper dollar contributes to more exports and job growth. Therefore, if this continues, we can almost expect some kind of political boost in the next week or two.
Was $ 65,000 up, Bitcoin down?
Two of the most frequently asked questions on all platforms, social media and chats about cryptocurrencies. The price campaigns in May and June only strengthened the bear sentiment in the crypto market.
Trader Josh Rager brought in back an “unpopular opinion” from 2020. Back then, he stated that the BTC peak for this current cycle could be lower than most expected. Projections estimated that the price of Bitcoin could reach as high as $ 100,000 or even $ 1 million, Rager thought that $ 78,000 and $ 85,000 were better estimates.
It’s hard to rule out a run like 2013, where the price hit a new high 8 months later after a steep pullback. But for bottom-up ROI to reduce each cycle – why should that be any different? People think $ 65,000 is not enough, but history says otherwise.
On the other hand, the former Goldman Sachs fund manager, Raoul Pal believes the US dollar could only strengthen in the short term. Due to the slowdown in the global economy, the Covid-19 pandemic and lockdown measures, many would have bet on a weaker dollar in 2020, Pal said.
Since the opposite appears to be happening, the forex market could be shaken. In the short term, this could continue to have an impact on Bitcoin and the crypto market. Despite this potential game, Pal is still long crypto.
This chart of the euro is a potentially huge head and shoulders top. Remember – 100% of all Wall Street FX forecasters were forecasting a weaker dollar in 2021 and positions hit record short levels in the dollar. If this breaks, a new macro regime will be in play.
There seems to be too many unknowns and uncertainties about the price of BTC and the overall market. The middle zone at the current level should serve as critical support. If the downtrend continues, many expect a return to the $ 20,000 area. The cops have to push for $ 40,000, only time will tell if Powell and the Federal Reserve will give them a boost.
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