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Weekly Market Wrap: Bitcoin Dips Below Key Support Level Amid ETF Sentiment Decline

Bitcoin faced downward pressure this week, dropping below $30,000, with ETF optimism waning. Industry experts emphasize the importance of holding above $28,000 to avoid further bearish momentum.

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Bitcoin’s Struggle Below $30,000 as ETF Enthusiasm Fades

Bitcoin endured a 1.93% decline from July 21 to July 28, reaching $29,199 at 6:30 p.m. Friday in Hong Kong. The crypto market’s enthusiasm over ETFs began to fade, contributing to the prolonged trading below the crucial $30,000 level. Ether also experienced a slight drop of 1.02%, closing the week at $1,867.

Bitcoin endured a 1.93% decline from July 21 to July 28, reaching $29,199 at 6:30 p.m. Friday in Hong Kong. The crypto market’s enthusiasm over ETFs began to fade, contributing to the prolonged trading below the crucial $30,000 level. Ether also experienced a slight drop of 1.02%, closing the week at $1,867.

Market Sentiment and Contributing Factors:

Analysts attribute Bitcoin’s dip below $30,000 to several factors. The short-term lack of positive catalysts and the diminishing ETF narrative due to a lack of new developments impacted market sentiment. Additionally, the sudden price decline was amplified by the liquidation of $30 million worth of long positions in leveraged futures on July 24.

The U.S. The Federal Reserve raised interest rates to between 5.25% and 5.5%, reaching the highest level in 22 years. Although market expectations were met, Fed Chair Jerome Powell’s indication of data-dependence for the next interest rate decision provided some optimism, hinting at a potential pause in the rate hiking cycle in September.

Impact of Interest Rates on Bitcoin:

The 22-year high in interest rates could strengthen the dollar, resulting in bearish implications for Bitcoin and other cryptocurrencies in the short term. Historically, central banks raising interest rates have negatively affected investor sentiment across various asset classes. However, the crypto market has recently been more resilient to macroeconomic events.

European Central Bank Rate Hike:

The European Central Bank also raised interest rates by 25 basis points, reaching a 22-year high of 3.75%. This decision came as the Eurozone sought to boost the value of the euro. The impact of this rate hike on Bitcoin’s performance is still to be seen.

Crypto Market Capitalization:

As of Friday at 6:30 p.m. in Hong Kong, the global crypto market capitalization stood at $1.18 trillion, marking a 1.66% decline from the previous week. Bitcoin’s dominance remained at 48.1% with a market cap of $567 billion, while Ether accounted for 19.1% with a market cap of $225 billion.

Notable Movers:

XDC Network’s XDC token gained 39.96% during the week, reaching $0.05903, following its announcement as a gold sponsor of the WebX Asia conference in Tokyo. Casper Network’s CSPR coin was the second biggest gainer with a 12.66% increase to $0.04023, driven by the announcement of a major upgrade to the Casper Wallet.

Outlook for Next Week:

Investors will closely monitor the release of the U.S. The jobs report, particularly nonfarm payrolls, to gauge the Federal Reserve’s future monetary policy decisions. In the crypto space, Litecoin’s upcoming halving on August 5 could impact block rewards for miners.

The decline below $30,000 has raised concerns among market participants. The $28,000 level is now crucial for Bitcoin to hold above, as it previously acted as strong support during corrections. Further bearish momentum could be triggered if this level is breached. Analysts anticipate ongoing fluctuations as the market seeks to establish a solid valuation for Bitcoin.

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