Bitcoin, the world’s leading cryptocurrency, is facing a dip of 3% as it trades at $29,171 on Tuesday. The failure to sustain higher price levels may have influenced aggressive bearish sentiments, leading to short positions, while short-term bulls have chosen to secure their profits.
Amidst the market fluctuations, two significant factors weighing on BTC’s performance are the ongoing Binance lawsuit and concerns over a potential rate hike.
As these uncertainties loom, investors closely monitor the market dynamics to make informed decisions.
Binance Lawsuit and Potential Rate Hike Weighs on BTC
The drop in BTC’s price is not definitively explained, but it coincides with a Wall Street Journal report that has sparked concerns among investors regarding Binance.
The report highlighted statements made by Binance CEO Changpeng “CZ” Zhao in 2019, which raised questions about potential “wash trading” activities by Binance affiliates during the launch of its US trading arm, leading to inflated trading volume suspicions.
Being the world’s largest cryptocurrency exchange, Binance is already facing legal challenges, having been sued by the Securities and Exchange Commission (SEC) last month.
It is currently under investigation by the Department of Justice, which may lead to a consent decree or settlement.
The investigation focuses on potential violations related to anti-money laundering and sanctions evasion, with potential implications for Binance’s future operations.
Moreover, investors closely observe the outcome of the Federal Reserve’s two-day meeting for hints about possible interest rate hikes.
Historical rate increases have contributed to bitcoin’s price decline, and market participants are cautious about the Fed’s future decisions, given ongoing recession concerns.
As the Federal Reserve meeting concludes, it is expected that bitcoin’s price may continue to experience fluctuations within a narrow range.
The market has already incorporated expectations of a 25 basis point rate hike by the Fed this week and is closely monitoring signals about future rate actions.
Until there is more data and confidence in inflation trends, the FOMC’s rate decisions will likely remain uncertain, potentially impacting Bitcoin’s ability to break out of the $31,500 level in the short term.
Investors will closely analyze the Fed’s statements for any potential impact on the cryptocurrency market.
Bitcoin Halving Occurs in Less Than 40,000 Blocks
On Monday, the Bitcoin network achieved a crucial milestone by reaching block 800,000, marking a significant turning point in the evolution of the world’s largest cryptocurrency.
As per Bitcoinblockhalf.com, this achievement also signifies that the next Bitcoin halving event, set to take place at block 840,000, and which will cut miners’ earnings in half, is now less than nine months away (or approximately 40,000 blocks).
Historical data suggests that Bitcoin halvings have played a role in driving price increases; it is crucial to consider that the cryptocurrency market is highly complex and subject to multiple influencing factors.
Therefore, the precise impact of the halving on BTC price remains uncertain and may be influenced by various dynamic elements in the market.
Bitcoin Price Prediction
Bitcoin, the leading cryptocurrency, experienced a sharp decline, approaching the $28,850 level.
However, a recent doji candle closure just above this critical level indicates a potential weakening of the bearish bias.
Additionally, the presence of both a doji candle and a spinning top candle around the $28,800 level further supports the possibility of a bullish trend or bullish correction.
Furthermore, the relative strength index (RSI) and moving average convergence divergence (MACD) indicators are holding in the oversold zone, adding to the potential for a bullish reversal.
Hence, it is essential to closely monitor the $28,850 level, as a break above it could lead Bitcoin to target an immediate resistance level of $29,500.
This resistance level aligns with the 50-day exponential moving average and was previously a significant support and double bottom level, dating back to July 24th.
As such, it is likely to act as a formidable resistance. If Bitcoin successfully surpasses the $29,500 level, the next target could be around $29,900 or $30,300 levels.
Traders and investors should remain vigilant for further price movements to gauge the potential for a bullish breakout or further bearish pressure on Bitcoin’s price.
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