The price of Bitcoin (BTC) broke through its all-important $21,000 support in its first week. The current largest cryptocurrency by market capitalization is currently trading at $20,963 after falling 4.41% in the last 24 hours.
Investors continue to be nervous
Last week’s rally was abruptly stopped not only by bitcoin, but also by ethereum and other cryptocurrencies. As investors await the Federal Reserve’s decision on their interest rates, their prices have plummeted.
On Tuesday, the Federal Open Market Committee will begin its monthly meeting and on Wednesday will announce its decision on how many basis points it will raise its base rate.
Economists predict that the Bank will continue to raise rates to reduce inflation. Economists expect the bank to raise rates by another 0.75%. This will lead to an increase in key rates from the beginning of the year to 225 basis points.
This month’s data shows US inflation hit 9.1% in July, the highest in more than four decades. Inflation exceeds 5% excluding volatile food and energy prices.
Historically, in times of rising interest rates, Bitcoin and tech stocks have lagged behind. This may explain why BTC prices fell over 50% in 2018.
As with stocks, it’s also a matter of whether these low prices are the right time to invest. This page will tell you how to buy bitcoins with a credit card.
As the reporting season progressed, the price of BTC dropped sharply. On Monday, Walmart warned that rising business costs could weigh on the company’s bottom line. The company’s share price fell more than 10% on Tuesday due to the warning. The US Dow Jones and Nasdaq 100 fell more than 0.50%. These indices have shown a strong correlation with bitcoin in recent years.
Investors remain concerned about current market conditions. The CNN Money Fear and Greed Index is 38. This indicates that investors are still worried about current market conditions. Market momentum, stock price strength and demand for junk bonds are in the zone of fear. Bitcoin is in fear zone 28.
Bitcoin Price Prediction
The chart shows that the price of BTC has been falling for several days, although last week investors were happy to see a rebound. The price of bitcoin has broken through the critical support level of $22,468, which was the high on July 7th.
The coin dropped below the 50-day and 25-day moving average lines. Moreover, the relative strength index shows a downward trend. Signs indicate that bitcoin continues to fall. The next target for traders could be the important support at $20,000.