विदेशी मुद्रा विश्लेषण और समीक्षा: 03.08.2023

03.08.2023 01:43 PM

Bitcoin's prospects may depend on US recession probability

The cryptocurrency market and Bitcoin have undergone significant changes after the Fed's decision on its key interest rate in the July meeting. The cryptocurrency broke through $30,000 and entered a new price range of $28,500-$29,700. Bulls have been trying to regain control and push the price above $30,000, but they barely succeeded.

The recent bullish momentum occurred on August 1 when bulls defended the key support level at $28,500. The price formed a bullish engulfing pattern and reached the psychological level of $30,000. However, the bullish momentum could not be sustained as bears managed to absorb the buying volumes and push the price back into the range of $28,500-$29,700 on August 2.

The role of the economic situation in the US

The economic situation in the US has historically influenced Bitcoin due to the Fed's policies regulating global economic liquidity. The recent drop in BTC/USD quotes was also tied to the economic situation in the US. The downgrade of the world's largest economy's credit rating to AA+ and statements from the US Treasury Secretary led to a significant strengthening of the USD index and a 4% rise in Treasury bonds.

This, in turn, caused a decline in most financial instruments, including BTC. As of August 3, the cryptocurrency is trading at $29,100 with trading volumes nearing $14 billion. Analysts from Grayscale suggest that the crypto market's prospects depend on the likelihood of a recession in the US. At the same time, Fannie Mae believes this may occur by the end of 2023.

In the short term, the situation around Bitcoin does not look optimistic due to the successful earnings season. As per Compound's data, 58% of S&P 500 companies have already reported on SP&500 EPS showing an 8% year-over-year growth, which led to reduced trading activity in the crypto market.

Accumulation of volumes continues

Despite the temporary market calm, the fundamental value remains strong, as evidenced by the continued active accumulation of BTC volumes by major investors. Whales, in particular, have resumed accumulation, which often leads to significant price movements. Overall, the number of BTC addresses with non-zero balances has reached a record 47.9 million.

However, short-term profit-taking by individual traders and whales selling over 250,000 BTC negatively affected the price movement. Mainstream holders are now dealing with the consequences of these actions.

BTCUSD review

Regarding the BTC/USD pair, there was an impulsive movement aimed at establishing a price above the range of $30,000-$30,200, but it occurred with declining volumes, indicating a lack of strong buyers. The recent price decline to the current levels happened with increasing bearish volumes, leading to a bearish engulfing pattern.

The market remains bearish, and Bitcoin is expected to continue moving within the range of $28,500-$29,700, testing the lower boundary. The main short-term targets for bears are located near $28,500 and $27,500, while bulls aim to solidify above the area of $30,000-$30,200, although their efforts are hindered by low volumes.

Despite the bearish sentiment, there might be another bullish momentum by the end of the current week, as bulls have shown resistance despite the bears' strength. Market data, along with potentially positive reports from AAPL/AMZN, could provide a new impulse to the BTC market.

Conclusion

Bitcoin continues to react strongly to macroeconomic data related to the Fed's policies and inflation. The publication of key macroeconomic indicators always triggers volatility and significant price reactions. In the short term, low trading volumes and investors focus on the stock market's earnings season influence the consolidation movement of BTC. The outlook is bearish, with at least one test of $28,500, and further declines are possible.

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