Bitcoin (BTC) slipped below $ 21,000 late on July 26, as Wall Street prepares for an early decision on further US monetary policy.
Bitcoin Price Chart (Bitstamp). Source: TradingView
The U.S. Central Bank is getting cold feet
As the data from Cointelegraph Markets Pro and TradingView show, the Bitcoin price ends its sideways movement and breaks down to an intermediate low of $ 20,788.
Compared to the high of 24,280 US dollars, which was still posted on July 20, the market-leading cryptocurrency is thus down 14%, which is primarily due to the fact that the American Central Bank will make a decision on a further key interest rate increase tomorrow, July 27.
The higher the key interest rate increase, the worse the cards for crypto investors, because the more restrictive the monetary policy, the less money is available for investments in risky investment products.
Meanwhile, the International Monetary Fund (IMF) has updated its forecast report World Economic Outlook for July 2022, predicting a further deterioration in the global economic situation, which would mean a minus of 3.2% for this year and a decline of 2.9% for 2023.
“The risk of a recession is particularly high for 2023, because in several economies growth will reach a bottom here, the savings of private households from the corona crisis will have been used up and even small shocks could bring the global economy to its knees,” said the gloomy outlook.
“For example, according to current forecasts, the US will achieve real GDP growth of only 0.6 percent in the fourth quarter of 2023, which makes preventing a recession a mammoth task.“
Looking at the daily chart, crypto analyst Rekt Capital warns that Bitcoin has probably already lost the upcoming upward trend again.
“BTC has lost the higher low, which had indicated an uptrend in the short term,” as the expert soberly comments on today’s downturn.
“The trend has changed.“
In another entry, he points out that the downturn of Bitcoin is only the logical consequence of the loss of the 200-week moving average, which was recaptured last week as an important support.
This #BTC pullback is the technical aftermath of rejecting from the 200-week MA after a Weekly Close below it$BTC #Crypto #Bitcoin pic.twitter.com/SRl2Qlcdp3
– Rekt Capital (@rektcapital) July 26, 2022
“Patience is a virtue,” says his colleague Anbessa. To this end, he elaborates:
“We should wait for a reversal pattern before we get back in. At $21,600, I don’t see an opportunity to get in, so we’ll have to be patient.“
Accordingly, Anbessa also sees “no reason to panic” at the current courses.
BTC at 1 million in five years?
Their interpretation seems to depend entirely on the time horizon considered, because the longer they become, the more optimistic the outlook.
“A volatile week is taking its expected course,” as crypto influencer IncomeSharks notes. “In a few months”, however, he sees the Bitcoin price fixed at $ 30,000 again.
“Now is not the time for a bad mood, that was last week,” the trader said.
PlanB, the inventor of the much-cited stock-to-Flow (S2F) calculation model, remains as confident as usual in the long run, so the expert believes that Bitcoin can still crack a price of $ 1 million by 2027.
He also sees completely new heights for the stock market in the next few years, pointing out the correlation to the crypto market leader, which should result in a rapid climbing game for both sides.
Some of you are afraid of macro and the link between bitcoin and stock markets etc.
IMO the next ~5 years S&P500 will be in the $5K-$6K range and bitcoin in the $100K-$1M range. Short term is noise, long term is signal. pic.twitter.com/rhz4cigHRc
– PlanB (@100trillionUSD) July 26, 2022