Bitcoin (BTC), the leading cryptocurrency in the world, started this news week on a bearish track and remained under pressure around 68,774, hitting an intra-day low of 68,300.

However, the reason for its downward trend could be attributed to a series of stronger-than-expected US economic data and hawkish comments from US Federal Reserve (Fed) officials.

These factors dampened near-term rate cut expectations and contributed to the decline in BTC, as higher interest rates strengthened the US dollar, making Bitcoin less attractive as an alternative asset.

Furthermore, tighter monetary policy reduces liquidity, decreasing investment in riskier assets like Bitcoin. On the positive side, the declines in BTC could be short-lived as Donald Trump has shown enthusiasm for cryptocurrency.

Trump’s support for cryptocurrency is positive for BTC, as it could lead to favourable regulations, increased adoption, and greater legitimacy for Bitcoin and the broader crypto market.

Impact of US Economic Data and Fed Comments on BTC Price Amidst Regulatory and Inflation Concerns

On the US front, the previously released stronger-than-expected economic data and hawkish comments from Federal Reserve officials have reduced the possibility of interest rate cuts. As a result, the financial market is now less hopeful about policy easing in September and anticipates only one rate cut by the end of the year.

This shift in expectations has caused investors to adjust their strategies, impacting various financial assets, including cryptocurrencies. The stronger economy suggests that the Fed might keep interest rates higher for longer to control inflation.

Therefore, the reduced likelihood of interest rate cuts and the stronger economy, influenced by US economic data and Fed comments, dampened investor sentiment, contributing to the drop in BTC price.

On the data front, US Durable Goods Orders increased by 0.7% in April, surpassing expectations of -0.8%, following a downward revision in March. Meanwhile, the University of Michigan Consumer Sentiment Index rose to 69.1 in May from 67.4 in April, beating the expected 67.5.

One-year inflation expectations edged up to 3.3% from 3.2%, while five-year expectations slightly decreased to 3% from 3.1%.

These figures indicate improved consumer sentiment and a stable short-term inflation outlook, reflecting positively on the economy but also raising concerns about potential longer-term inflationary pressures.

Trump’s Support for Cryptocurrency and its Impact on Bitcoin Prices Amid Regulatory Challenges

On the positive side, former US President Donald Trump has shown strong support for cryptocurrency. He has pledged broad support for the crypto industry, aiming to attract and retain digital currency businesses in the US. Trump’s backing extends to startups, evident from his plans to invest in crypto ventures. He embraces the idea of cryptocurrencies as a new and growing industry.

Trump isn’t just expressing support in words; he’s backing it up with actions. He’s planning to invest in crypto startups and has even embraced cryptocurrencies himself by accepting donations and selling NFTs.

However, regulatory challenges persist, highlighted by ongoing SEC lawsuits against Ripple Labs Inc., Kraken, Binance, and Coinbase. Therefore, Trump’s support for cryptocurrency, including Bitcoin, boosts investor confidence and adoption, driving up BTC prices.

However, lingering regulatory uncertainties, exemplified by SEC lawsuits, may limit price gains.

BTC/USD Price Forecast

Bitcoin is trading at $68,065, reflecting a 0.63% increase on the 4-hour chart. The pivot point at $69,005 is critical for determining market direction. Immediate resistance levels are identified at $69,588, $70,644, and $71,944.

On the downside, immediate support is observed at $67,265, followed by $66,380 and $65,144. The Relative Strength Index (RSI) stands at 50.23, indicating neutral market sentiment, neither overbought nor oversold.

The 50-day Exponential Moving Average (EMA) is positioned at $69,005, acting as a crucial resistance level that Bitcoin must surpass to confirm an upward trend. The current price remaining below the pivot point suggests that Bitcoin may face downward pressure.

However, a break above $69,005 could signal a bullish trend, targeting higher resistance levels.

Conversely, holding below this level could lead to further declines, with support levels at $67,265 and lower providing crucial thresholds to watch.