In recent trading sessions, Bitcoin has experienced a 2.5% drop, raising questions about the future trajectory of the leading cryptocurrency. As market participants analyze various technical indicators and market trends, it becomes crucial to understand the factors that may influence Bitcoin’s next move.
In this Bitcoin price analysis, we will discuss the current market conditions, key support and resistance levels, and possible scenarios for the BTC price in the near future.
Fed Rate Hike Expectations
The US Personal Consumption Expenditures (PCE) Index data from last Friday, which was expected to be the week’s big macro event, fell short of expectations. However, the dollar rose as data suggested the Federal Reserve will not defer raising interest rates. The dollar index (DXY) has increased by 0.15% to 101.81.
The interest rate will likely increase by 25 basis points at the Fed’s rate decision on May 3, going from 5% to 5.25%. Furthermore, the probability of a rise in June rose to 27%.
If the Fed deviates from this strategy and suggests an increase of more than 25 basis points, it would be a hawkish hold that indicates a stronger US Dollar, resulting in a decline in the price of BTC/USD. Therefore, investors are exercising caution because this macroeconomic event may cause volatility.
The BTC/USD pair is trading at $28,591, down by 2.5% in a day. The price of Bitcoin decreased after the US PCE data sparked expectations for another Fed rate hike in June. The Bitcoin prices fell dramatically from the 29,600 level to the 28,640 level. On the four-hour timeframe, Bitcoin has crossed below the 50-day exponential moving average, which was a supporting area of around 29,000.
The formation of candles suggests that the bearish bias is dominating in the market, and at the same time, the RSI & MACD indicators are in the sell zone, supporting the chances of a downtrend in Bitcoin price today.
On the lower side, Bitcoin is likely to find immediate support around the 28,000 level, which is being extended by a trendline that you can see on the 4-hour timeframe. A break below this particular 28,000 level has the potential to lead BTC price to the next support level of 27,195.
This article was originally published by CryptoNews.