BTC Price Analysis: Selling Pressure Resumes Post-Fed Rate Decision
On Wednesday, the BTC price showcased low volatility after the US Federal Reserve announced its fifth interest rate decision. During the Jerome Powell speech, no significant move was observed, but a slight decline remained due to the prevailing bearish momentum.
Fed Holds Rates Steady in July 2024
The U.S. Federal Reserve announced its latest decision on interest rates on July 31, 2024, following a two-day Federal Open Market Committee (FOMC) meeting. The central bank decided to maintain the federal funds rate within the range of 5.25% to 5.50%, which aligns with market expectations. This marks the seventh consecutive meeting where rates have been held steady after a series of aggressive hikes that began in March 2022 to combat inflation.
Holding rates steady can bolster investor confidence, as it indicates a measured response to current economic conditions rather than a sudden shift in monetary policy. FOMC statement-
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance. The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.
Wedge Pattern Indicates Potential BTC Price Drop
During Federal Reserve Chair Jerome Powell’s speech on Wednesday, the Bitcoin price remained stable at around $66,000. However, supply pressure soon returned to the crypto market, resulting in a more than 2% drop in Bitcoin to $64,750, with its market cap decreasing to $1.278 trillion.
This decline marks a notable reversal in BTC’s daily chart at the resistance line of the broadening wedge pattern, a setup characterized by diverging trendlines that have governed its consolidation trend in recent months.
Historically, reversals from this pattern’s resistance have led to significant corrections testing the lower boundary. The Moving Average Convergence Divergence (MACD) nearing a bearish crossover suggests that further selling pressure could prolong the price correction. If the selling continues, BTC price forecast targets drop to $63,370, followed by $60,000.
Conversely, the daily Exponential Moving Averages (EMAs) for 50 and 100 days, currently near $63,370, might provide support and prevent a further downturn. If this potential reversal fails, it could pave the way for a breakout from the wedge pattern, enabling BTC to surpass its previous high of $73,680.
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