Bitcoin
Bitcoin Price is Facing a Major Hurdle at $26,500 Amid Fed Concerns
Bitcoin price has been struggling to break above the crucial resistance level of $26,500 for the past few days. The premier cryptocurrency has slumped by more than 13% in the month to date but remains 56% higher in the year to date. Bitcoin’s total market cap is a formidable $503 billion, down by more than 20% compared to its highest level so far this year of $612 billion. At the time of writing, the Bitcoin price was trading 1.50% lower at $25,797.25.
Fundamentals
Just like most altcoins, Bitcoin, the biggest cryptocurrency by market cap, has been in consolidation mode in recent trading sessions amid a strong bear market. Ethereum, the largest altcoin by total market cap, has been hovering below the important resistance level of $1,700 after facing a strong rejection at the level. According to Coinmarketcap, the global crypto market cap remains lower at $1.04 trillion, while the total crypto market volume increased slightly over the last day.
The Crypto Fear & Greed Index, which is a key measure of the crypto market sentiment by its participants, was at a fear level of 37 on Friday. This is a slight decline from the fear level of 40 recorded earlier this week. Additionally, it indicates that the risk appetite among investors has inched lower compared to last month’s neutral level of 49.
Focus will now be on the US Federal Reserve ahead of its two-day policy meeting slated for the 19th and 20th of September. US Treasury yields have been in the red for the past two trading sessions as investors assessed the possibility of further rate hikes by the central bank amid stronger-than-expected economic data.
Economic reports released on Thursday signaled an increase in inflationary pressures and a tighter labor market, fueling concerns that the Fed’s interest rate hike campaign might not be over yet. The US dollar is hovering around its highest level since March 2023, buoyed by the resilient US economic data. At press time, the US dollar index, which measures the performance of the greenback against other major currencies, was trading higher at 105.
According to the CME FedWatch Tool, markets are pricing in a 93% chance of the Federal Reserve leaving interest rates unchanged in its September meeting. Notably, expectations for a rate hike in November are roughly 43%. An environment of higher interest rates is usually bearish for risk assets, particularly cryptocurrencies.
Bitcoin Price Outlook
The daily chart shows that the Bitcoin price has been range-bound for the past few days, trading between the tight range of $25,300 and $26,220. The digital asset hit an intraday high of $26,445.50 earlier on Friday before pulling back. Bitcoin remains below the 50-day and 200-day exponential moving average, amid a looming death cross, which usually signals a bearish market.
Additionally, the BTC/USD pair remains below the 50-day and 200-day simple moving averages. The Bollinger bands have narrowed as seen on the daily chart, pointing to low volatility. Its Relative Strength Index (RSI) remains below the neutral zone, hinting at an increase in selling pressure.
As such, I expect the Bitcoin price to remain below the crucial resistance level of $28,000 in the short term. In particular, the range between $25,300 and $26,880 will be worth watching in the ensuing sessions. A flip above the upper range might pave the way for further gains to the 200-day EMA at $27,065. Conversely, a move below the lower range might give bears enough momentum to push the price lower to June’s low at $24,880.
BTC Price Chart