Bitcoin Price Faces Double Trouble Amid SpaceX’s Write-Down and Fed Rate Concerns

Bitcoin worth has been in a steep freefall over the previous couple of days on the again of a wave of danger aversion all through world markets and issues concerning the Fed’s rate of interest path. Bitcoin, the biggest cryptocurrency by market capitalization, has crashed by greater than 10% over the previous week to its lowest degree since June 2023. The asset’s complete market capitalization has slumped by 7.27% to $514 billion over the past day, whereas the whole quantity of BTC traded over the identical interval jumped by greater than 107%.

Fundamentals

Bitcoin worth has been within the purple for the previous few days amid financial uncertainty and a decline within the crypto market sentiment. The worldwide cryptocurrency market cap has decreased by 6.12% over the previous 24 hours to $1.06 trillion, whereas the whole crypto market quantity elevated by greater than 97%. Bitcoin’s dominance has additionally slipped over the identical interval to 48.46%.

Most altcoins, together with Ethereum, the biggest altcoin by market cap, have been in a steep downward trajectory for the previous few days. Among the many worst performers within the crypto market are XRP, Cardano, Solana, Polygon, Litecoin, Shiba Inu, Avalanche, and Bitcoin Money, which have all dropped by greater than 10% every.

The Crypto Concern and Greed Index, which measures the sentiment of the cryptocurrency market members on a scale from 0 to 100, exhibits that the market is in excessive worry. At press time, the index studying was at a Concern degree of 37, down from a impartial degree of fifty two days in the past. A Concern degree normally exhibits that traders have began promoting irrationally.

The greenback is headed for a fifth profitable streak in opposition to its main friends, the longest streak seen in 15 months. The US greenback index, which measures the efficiency of the dollar in opposition to six developed market rivals, together with the Euro and Yen, has climbed to 103.52. A stronger greenback is normally bearish for property resembling shares and cryptocurrencies.

Catalysts Behind BTC’s Decline

The Bitcoin worth selloff got here a number of hours after the Wall Avenue Journal reported that SpaceX, owned by Elon Musk, wrote down the worth of Bitcoin it owns by a complete of $373 million in 2022 and 2021, and bought its holdings of the digital forex. Based on researchers and analysts, the corporate’s transfer is probably the most brutal minute-by-minute selloff ever seen within the historical past of Bitcoin.

In 2022, Tesla Inc, which can be owned by Elon Musk, introduced that it had bought 75% of the Bitcoin it had bought, a bit of greater than a yr after investing $1.5 billion within the digital forex. Tesla additionally recorded about $101 million of Bitcoin prices in 2021, when it bought a few of its holdings. Elon Musk has traditionally been a vocal supporter of the crypto business.

Bitcoin worth has additionally been below intense strain because of the uncertainty across the Fed’s financial coverage path. FOMC assembly minutes launched earlier this Wednesday pointed to the potential for additional rate of interest hikes. Through the two-day coverage assembly in July, policymakers famous that inflation stays too excessive and additional financial coverage tightening is likely to be wanted to ease pressures from larger costs.

Bitcoin Value Technical Evaluation

The every day chart exhibits that the Bitcoin worth has been on a bearish trajectory for the previous few days, crashing to its lowest degree in two months. On the time of writing, Bitcoin was buying and selling decrease at $26,500. The digital asset has dropped beneath the 50-day and 200-day exponential transferring averages, in addition to the 50-day and 100-day easy transferring averages. Its Relative Energy Index (RSI) dropped to the oversold area at 20.

Due to this fact, the Bitcoin worth is more likely to proceed falling within the ensuing periods amid financial uncertainty and a decline in market sentiment. As such, the BTC worth is more likely to drop additional to the speedy assist degree of $25,800. Nonetheless, a flip above the 200-day EMA at $27,265.50 would possibly pave the way in which for extra upside.