There’s been a clear sign that Bitcoin may be oversold at the moment, as the price hasn’t seen significant positive action for weeks. What’s more, micro dips are happening all the time. But, even then, Bitcoin has been (barely) holding the $29,000 price range, and according to experts, any bounces might be disappointing for traders and investors.
The current price is the biggest dip in the past six weeks, but the worst has yet to come. The breakdown is due to a new macroeconomic paradigm right around the corner – the expected Fed rate hikes. The Federal Reserve may be at the end of its most strict monetary tightening, but unlike previous optimism, it seems that Bitcoin simply fails to react.
A Lower Dip Expected?
Some traders and experts believe that while equities are booming and rate hikes stay up, Bitcoin could reach new lows. By new lows, we mean dips as low as $25,000, which isn’t what anyone wants to hear right now. Capriole Investments thinks that the crypto market needs more time for the reality to sink in. While BTC prices have been dipping, the S&P500 has just had its longest winning streak. The Fed has put rate hikes on pause in the middle of the tightest monetary policies.
In reality, the world is at a macro pivot point. A new monitory policy regime may give Bitcoin the life it needs, but that could come years down the road. Right now, the technical and fundamentals are obvious saying it’s not the time for Bitcoin price hikes. That may not be what we all hoped for, but it’s the inevitable reality.
At the moment, the next support levels are $28K, $24K, and the lower end of the $20,000s. The silver lining is that they all offer better relative opportunities for the price to rise. In essence, everything says that Bitcoin’s trajectory in the near future is pointing up. But, if history has taught us anything so far, it’s that traders need to be patient.
Historically Positive Performance
Whenever Bitcoin was in overbought territory in the past, it has done much better than when it was oversold. Right now, it’s the second case. Prices have been steady for the past month, but unfortunately for bulls, there’s no change on the horizon. There’s no Fed central meeting schedule for August. However, there will be a central bank conference later this month that might give us a clue where the macros are heading. Future monetary policies can say a lot about Bitcoin, but for its future performance. When it comes to the next few months, bounces might disappoint.
And there’s something else that can shape the future of Bitcoin’s price – the SEC decisions. The US watchdog has been leaning heavily against Coinbase and Binance, and that’s affecting the crypto market as well. Upcoming news on the Bitcoin spot ETF may bring pleasant changes, but we won’t hear about it until Labor Day, and no one can say it’ll be positive wind.
For now, it’s just best to stay put and see how the price shapes up week by week.