The world’s leading cryptocurrency, Bitcoin, is currently facing a slight downfall as it trades at $29,171, experiencing a dip of 3%. Traders’ decision to lock in profits amidst the inability to maintain higher prices might be contributing to the bearish trend.
Within the stormy market, two main forces seem to be driving BTC’s performance down – the ongoing legal issues involving Binance, and fears over a possible interest rate increase. Accurately following the market dynamics is of utmost importance for investors in this turbulent scenario.
A salient factor affecting Bitcoin’s price is the ongoing legal turmoil involving Binance. A Wall Street Journal report raised questions about so-called “wash trading” activities by Binance affiliates during the launch of its US arm in 2019. Culminating to further suspicion is the lawsuit filed against Binance by the Securities and Exchange Commission (SEC) last month. The legal challenges that hover over the world’s largest cryptocurrency exchange might be impacting the market sentiment towards BTC.
Adding to the conundrum is the looming Federal Reserve’s two-day meeting, forming the second factor that’s impactful on BTC’s performance. Expectations of a 25 basis point rate hike by the Fed has already been absorbed by the market, causing anxiety among investors. In the past, rate increases have negatively influenced BTC prices. Consequently, until clearer data and confidence in inflation trends emerge, vacuum of uncertainty with the Federal Reserve’s rate decisions may continue to impact Bitcoin’s progress.
Significantly, Bitcoin has recently celebrated a significant turning point in its journey with the achievement of the block 800,000. This implies that the upcoming halving event, a reduction of miners’ earnings into half, is just about nine months or nearly 40,000 blocks away. It’s noteworthy that such halving events have historically instigated price spikes. However, it’s also worth noting that the influences on cryptocurrency market are multifactorial and it remains to be seen what exact impact the halving will have on BTC price.
Analysts denote the recent minor plunge in BTC price with the closure of a doji candle – a technical chart pattern – above the $28,850 point, hinting at a dilution of the bearish trend. The presence of another doji candle and a spinning top candle around the same $28,800 level points to a potential bullish trend. Thus, investors are carefully monitoring these levels which could determine Bitcoin’s trajectory in the short term.
In perspective of these factors, it’s safe to say that the world of digital assets is undergoing a period of significant change and investors should stay abreast by regularly evaluating trends and potential investments. Cryptocurrencies are fraught with unpredictability and potential for swift shifts, therefore, always ensure to conduct due research.
Source: Cryptonews
