The virtual currency that took the world by storm, Bitcoin (BTC), continues to play a high-stakes game of tug-of-war with the $29,500 support level. Its performance oscillated just north of $30,000, maintaining momentum through multiple rallies by the bulls. At the same time, the cryptocurrency sector has been idling between $29,500 and $30,500, a rather dull performance in stark contrast to the lavish strides it took last Friday, which saw BTC hitting an annual high in the $31,800 range. This boost was fueled largely by widespread optimism surrounding a ruling on XRP by a US judge in the SEC vs Ripple labs lawsuit.
Given the dearth of major US economic events and updates on institutional adoption, the sideways trading conditions that Bitcoin experienced aren’t as astounding as one might imagine. Traders and analysts are keeping a vigilant eye on BTC’s 21-Day Moving Average.
The 21DMA, which most recently hovered shy of $30,400, has proven to be a formidable barrier to BTC’s short term gains. A triumphant charge past this level might pave the path to the upper limits of Bitcoin’s multi-week range in the $31,000s. Thankfully for Bitcoin enthusiasts, who have shown signs of fatigue over the monotonous trading conditions, a potential catalyst looms on the horizon.
A much-anticipated meeting of the US Federal Reserve next week has the potential to shake Bitcoin from its slumber. It is widely projected that the policy announcement will entail a 25 basis point increase in interest rates, skyrocketing them to their highest since 2001.
Banking authorities have hinted at another hike in September, but the consensus among economists and a prominent ex-member of the Fed, is that this is unlikely to be the case. According to CME’s Fed Watch Tool, US money markets have an implied probability of about 84% of the Fed maintaining interest rates after next week’s increase.
The US labour market remains buoyant, taking the possibility of imminent rate cuts off the table. However, recent favourable developments around US inflation suggest there won’t be a need for another rate hike in September, marking a key turning point in not just the US, but the global macroeconomic cycle.
The market can start expecting conditions to ease financially, a key factor that has spurred Bitcoin’s performance in 2023. Current optimism over potential institutional adoption, following recent spot Bitcoin ETF filings by industry stalwarts like BlackRock and the SEC’s recent defeat at the hands of Ripple Labs, could nudge Bitcoin to fresh yearly highs. Moreover, bullish technical set-ups and strong signals from on-chain indicators substantiate the claim that we are at the cusp of an early-stage bull market.
Source: Cryptonews
