Bitcoin price under pressure as investors anticipate further sell-off

Bitcoin (BTC), the world’s foremost cryptocurrency, has continued its downward trend, trading around $67,925 and reaching an intraday low of $67,786. This 2.5% drop has raised concerns about the potential for a larger sell-off among investors and market analysts. The recent decline in Bitcoin’s price is primarily attributed to the robust May employment report from the US, which revealed an addition of 272,000 jobs. This positive employment data has diminished hopes for an imminent rate cut by the Federal Reserve, influencing market dynamics.

The strong job growth has had a dual impact on the market by strengthening the US dollar and increasing Treasury yields, both of which have contributed to Bitcoin’s losses. As a result, investors are closely watching Bitcoin’s next move, making price predictions a hot topic of discussion. Despite significant investments in bitcoin ETFs, which saw $886.6 million in daily inflows, bitcoin struggled to maintain a price above $70,000. Traders have been capitalizing on price discrepancies through arbitrage between ETFs and CME bitcoin futures, adding to the market’s volatility. Additionally, Robinhood’s acquisition of Bitstamp is aimed at enhancing its global crypto presence, though it has not provided the expected support for Bitcoin’s price.

In line with Microstrategy’s strategy, Semler Scientific has also started investing in Bitcoin as part of its treasury assets, indicating a growing trend among companies to diversify into cryptocurrencies. Market analysts are also closely monitoring the Consumer Price Index (CPI) data and comments from Fed Chair Jerome Powell for insights into future rate cuts, which could further influence Bitcoin’s trajectory.

Bitcoin’s struggle to stay above the $70,000 mark, despite substantial ETF investments, underscores the market’s vulnerability. Traders exploiting arbitrage opportunities and the anticipation of Powell’s remarks on rate cuts are significant factors influencing Bitcoin’s price volatility. The May employment report, showing the addition of 272,000 jobs, has boosted the US dollar and led to a decline in Bitcoin prices. The Nonfarm Payrolls report exceeded expectations, reducing the likelihood of a September rate cut from 70% to around 50%, which has had a ripple effect on the cryptocurrency market.

This robust economic data has caused Treasury bond yields to rise and the US dollar to reach its highest level in nearly a month. Investors now expect only one 25-basis-point reduction later in the year, possibly in November or December. Additionally, average hourly earnings increased by 4.1% over the past year, surpassing expectations. This increase could lead to higher prices and prompt the Federal Reserve to maintain higher interest rates for a longer period, further strengthening the US dollar and exerting downward pressure on Bitcoin prices.

Key points driving this situation include the strong US dollar and robust job data leading to a drop in BTC prices, and investors revising their expectations for rate cuts, which has caused Treasury yields to rise. Bitcoin (BTC/USD) has experienced a notable decline to $67,850, heavily influenced by recent economic data and projections from the US Federal Reserve.

The Federal Funds Rate remains at 5.50%, maintaining high borrowing costs. The Federal Open Market Committee (FOMC) has highlighted persistent inflationary pressures and the potential for sustained high interest rates, unsettling investors. Additionally, the Federal Budget Balance showed a significant deficit of -$259.3 billion, in stark contrast to the previous surplus of $209.5 billion. This negative fiscal data has further strengthened the US dollar and increased Treasury yields, which has negatively impacted Bitcoin.

Bitcoin is currently trading with a bearish bias, with the pivot point at $68,350 suggesting a bearish outlook. Immediate resistance levels are observed at $69,200, $70,150, and $71,100, while support levels are at $67,850, $66,600, and $65,900. Technical indicators also reflect a bearish trend. The Relative Strength Index (RSI) is at 31, indicating oversold conditions and the potential for further downward movement. The 50-day Exponential Moving Average (EMA) is at $69,500, showing that the current price is significantly below this average, signaling sustained bearish pressure.

Moreover, a bearish engulfing candle on the 4-hour timeframe below the $68,350 level suggests a continuation of the downward trend. Both RSI and EMA indicators support this bearish stance, painting a challenging picture for Bitcoin in the short term.

Bitcoin remains bearish below $68,350. While a break above this level could shift momentum towards a bullish bias, current indicators favor a continued decline. Investors and traders will need to keep a close watch on economic indicators and Federal Reserve announcements, as these will play a crucial role in shaping Bitcoin’s future price movements.