Bitcoin shows signs of a bottom  

Aggressive selling pressure has caused the price of Bitcoin to drop from $72K to $66.1k the 8.3% decline was probably caused by several things, including the unpredictability of pre-CPI data, a significant withdrawal from Bitcoin ETFs, the distribution of whales, and the surrender of Bitcoin miners.  The super crypto asset formed a bearish reversal pattern throughout the decline and broke important support to indicate that the slump might be temporary.

Bitcoin

Bitcoin hasn’t closed below $66,000 since May 17, despite testing the $65k support level. Even though Bitcoin price action shows a lack of momentum to surpass the $72k barrier over these four weeks, a few developments have raised regulatory confidence, showing how little room the US central bank has left to maneuver without inciting inflation. 

According to robust measures for Bitcoin derivatives and favorable market conditions, there is little downside. Bitcoin dropped 8.5% between June 6 and June 14, the price of testing the $65K support level. Its key derivatives metric did not significantly change despite this decline. The differential between the spot price on normal exchanges and the monthly contracts in derivatives markets is reflected in the Bitcoin futures premium. 

Bitcoin presses on its neckline, and the double top pattern on the chart breaks the previous level, waiting for the pattern’s negative effects to reactivate before rallying to continue the decline daily. Negative targets are located at $65.8K and $60.3K respectively. Therefore, unless the price breaks $69.4K and stays above it,  the negative trend is for the foreseeable future. There is increasing pressure on the US Federal Reserve to cut interest rates to avert a recession.  

Current data indicates that the headline Consumer Price Index (CPI), which is 3.4%, continues to stubbornly exceed the Federal Reserve’s 2% objective for inflation. Together with a minor increase in unemployment from 3.9% to 4% in May, this ongoing inflation suggests that the labor market is starting to weaken. 

The Fed’s recent decision to scale back its quantitative tightening program highlights cautious optimism that inflation is stabilizing and shows how cautiously it approaches monetary policy. But if the Fed doesn’t change its policies soon, it might worsen economic downturns as high borrowing costs will still discourage crypto investment and consumer spending. 

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ABOUT THE AUTHOR See More
Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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