Bitcoin Price Plunges Below $30K: Fed Meeting Sparks Market Jitters

Bitcoin price has been trading sideways for the past few days as investors weigh what could be the monetary policy outlook ahead of the Fed meeting next week. Bitcoin, the largest cryptocurrency by market cap, has crashed by more than 5% in the past week but remains up by 80% in the year to date. The asset’s total market cap has slipped to $580 billion over the last day, while the total volume of the BTC traded over the past 24 hours jumped by 6.76%.

Fundamental Analysis

Bitcoin price was in the red on Friday, dropping below the important level of $30,000 as cryptocurrencies continue to underperform, indicating bearish cryptocurrency sentiment. The global crypto market cap has slipped to $1.2 trillion over the last day, while the total crypto market volume increased by 6.67% over the same period. Bitcoin’s dominance has also edged lower to 48.29%.

A look at the Crypto Fear and Greed Index shows a lack of confidence in the crypto market by investors. The Index has slipped from a Greed level of 64 seen last week to a neutral level of 55. This shows that investors have entered conservation mode, which could prompt them to look for alternative investments.

Bitcoin’s underperformance is worrying against a backdrop of several catalysts. Over the past few weeks, the crypto market has been buoyed by BlackRock and other financial bigwigs’ filings for spot Bitcoin exchange-traded funds (ETFs), which saw the Bitcoin price jump to the $31,000 zone. Ripple Labs’ court win also built on the bullish crypto sentiment. Even so, none of these catalysts has been long-lived, helping the crypto prices hold onto their important levels.

The focus will be on the US Federal Reserve’s two-day monetary policy meeting set to happen on July 25 and 26. Markets are widely anticipating the central bank to announce an interest rate hike after the meeting. According to the CME FedWatch Tool, markets are pricing in a 99.8% chance of the Fed implementing a 25-basis point hike in its meeting next week.

Bitcoin Price Outlook

Bitcoin price has been trading sideways for the past few days, failing to start a fresh rally above the crucial level of $30,000. At the time of writing, the digital currency was trading lower at $29,779.45. BTC is holding slightly above the bullish support level of $29,588.85. The asset remains slightly above the 50-day and 200-day exponential moving averages, as indicated on the daily chart. Its Relative Strength Index (RSI) has moved below the signal line and the neutral zone.

Therefore, there is a likelihood that the Bitcoin price will pull back further, dropping below the support at $29,588.85. If this happens, the next support level to watch will be $28.465.20. However, we cannot rule out a move past the crucial $30K level which could initiate a fresh rally to $31,000.

BTC Price Chart