Long-term fundamentals are meeting a short-term resistance level.
BTCUSD: Weekly Chart
The 30,000 level is still the critical line in the sand for BTC, but the 31,050 price resistance has been the overhead level for the coin. A potential drop to $26,000 is possible if the price exceeds this level.
Bitcoin can only get a bid with the long-term fundamentals being talked about. The first is Bitcoin ETFs, and the price of the Coinbase exchange hit new highs for the year after it signed a partnership to provide data for CBOE ETFs.
Alongside the BlackRock application, cryptocurrency prices are not seeing new speculative inflows.
The next issue being discussed by analysts is next year’s “halving” event, which is preprogrammed into the coin. Mining rewards are cut in half for those mining BTC, and that is said to reduce coin supply.
Despite the hype, similar events in Litecoin have yet to create any material rally in the coin.
Bitcoin’s price is also not advancing on the short-term economic drivers, where the Federal Reserve seems to be at the end of its hiking strategy. Analysts expect two more interest rate hikes from the Fed, but this week’s inflation has supported a pause.
US goods and services slowed to a two-year low in June, which boosts the chances of a change in the Fed’s monetary policy stance. The latest consumer price index (CPI) figures were still higher by 3% over the last year, the smallest increase since March 2021 and down from a four-decade high of 9.1% in June 2022.
After all the talk of inflation and rate hikes hurting the price of Bitcoin, the slowing of inflation does not have the reverse effect. There is a risk that Bitcoin’s speculative rally is running out of steam at $30,000, and a correction is possible here.
