Bitcoin Price Forecast as BTC Declines by 2.5% – Potential for Larger Sell-Off?
Arslan Butt
Last updated:
June 11, 2024 05:35 EDT
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4 min read
Bitcoin Price Forecast
Bitcoin (BTC), the dominant cryptocurrency globally, continued its downward trend, hovering around the $67,925 mark and hitting a low of $67,786 during the day. This recent drop of 2.5% has raised concerns about the possibility of a more significant sell-off.
The decline can be attributed to the strong May employment report from the US, which revealed the addition of 272,000 jobs, diminishing hopes for a Federal Reserve rate cut.
The robust job growth has strengthened the US dollar and pushed up Treasury yields, contributing to the losses in Bitcoin. As investors grapple with these developments, speculation around Bitcoin’s price forecast remains a popular topic.
Bitcoin Price Volatility Amid ETF Inflows and Market Changes
Despite substantial investment in bitcoin ETFs, with daily inflows of $886.6 million, the value of Bitcoin failed to stay above $70,000. This decline was driven by traders taking advantage of price differences through arbitrage between ETFs and CME bitcoin futures. Furthermore, Robinhood’s acquisition of Bitstamp is aimed at enhancing its global presence in the crypto market.
Semler Scientific is adopting Microstrategy’s approach by including Bitcoin in its treasury assets. Observers are closely monitoring CPI data and statements from Fed Chair Jerome Powell for insights into potential rate adjustments.
Bitcoin’s inability to maintain a position above $70,000 despite significant ETF investments underscores market fragility. Traders exploiting arbitrage opportunities and anticipation of Powell’s remarks on rate cuts are key factors affecting Bitcoin’s price volatility.
Impact of Strong US Dollar and Positive Job Data on Bitcoin Prices
The robust May employment report, indicating the addition of 272,000 jobs, boosted the US dollar and led to a decline in Bitcoin prices. The Nonfarm Payrolls report surpassed expectations, reducing the likelihood of a rate cut in September from 70% to around 50%.
This resulted in a rise in Treasury bond yields and the US Dollar reaching its highest level in nearly a month. Investors now anticipate only a single 25-basis-point reduction later in the year, possibly in November or December.
Average Hourly Earnings rose by 4.1% over the past year, exceeding expectations. This could lead to increased prices and prompt the Federal Reserve to maintain higher interest rates for a longer period. Consequently, the stronger US dollar and positive job data pushed Bitcoin prices lower.
In summary:
Strong US dollar and robust job data led to a decline in BTC price.
Investors adjusted rate cut expectations, leading to a rise in Treasury yields.
Federal Reserve’s Economic Projections and Budget Deficit Influence Bitcoin Downturn
Bitcoin (BTC/USD) experienced a significant decline, with its price dropping to $67,850. A major factor behind this decline is the recent economic data and projections from the US Federal Reserve.
The Federal Funds Rate remains at 5.50%, maintaining elevated borrowing costs. The Federal Open Market Committee (FOMC) economic projections and statement highlighted persistent inflationary pressures and the potential for sustained high interest rates, unsettling investors.
Moreover, the Federal Budget Balance displayed a substantial deficit of -$259.3 billion, a sharp contrast to the previous surplus of $209.5 billion. This negative fiscal data adds to worries about the US economic outlook, further strengthening the US dollar and increasing Treasury yields.
These developments have adversely affected Bitcoin, as a stronger dollar and higher yields typically divert investment away from riskier assets like cryptocurrencies. Consequently, Bitcoin’s price has come under pressure, reflecting broader market reactions to these economic indicators.
Bitcoin Price Forecast
Bitcoin (BTC/USD) is trading with a strong bearish bias, with the pivot point set at $68,350, indicating a bearish Bitcoin price forecast.
Immediate resistance levels are observed at $69,200, $70,150, and $71,100. On the downside, immediate support lies at $67,850, with further support at $66,600 and $65,900.
Technical indicators also signal a bearish outlook. The Relative Strength Index (RSI) stands at 31, indicating oversold conditions and the potential for further downward movement.
The 50-day Exponential Moving Average (EMA) is at $69,500, suggesting that the current price is significantly below this average, pointing to sustained bearish pressure.
A bearish engulfing candle on the 4-hour timeframe, particularly below the $68,350 level, indicates a continuation of the downward trend. Both RSI and EMA indicators support this bearish stance.
In conclusion, Bitcoin remains bearish below $68,350. A breakthrough above this level could shift momentum towards a bullish bias, but current indicators favor continued decline.
