The world’s leading cryptocurrency bitcoin is facing a 3% drop as it is trading at $29,171 on Tuesday. Failure to hold higher price levels could have fueled aggressive bearish sentiments, leading to short positions, while short-term bulls chose to protect their profits.
Amidst the volatility in the market, two important factors affecting the performance of BTC are the ongoing Binance lawsuit and concerns over a possible rate hike.
As these uncertainties increase, investors closely monitor market movements to make informed decisions.
Binance Lawsuit and Potential Rate Hike Have an Effect on BTC
The drop in BTC price is not explained with certainty, but it coincides with a Wall Street Journal report that raised concerns among investors regarding Binance.
The report highlighted statements made by Binance CEO Changpeng “CZ” Zhao in 2019, which raised questions about possible “wash trading” activities by Binance affiliates during the launch of its US trading arm, which raised suspicions of increased trading volumes.
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 could lead to a consent decree or settlement.
The investigation focuses on possible violations related to anti-money laundering and evasion of sanctions, which could have a potential impact on Binance’s future operations.
In addition, investors are closely watching the outcome of the Federal Reserve’s two-day meeting for signs of a possible interest rate hike.
The historic rate hike has contributed to the fall in the price of bitcoin, and market participants are cautious about future Fed decisions given the current recessionary concerns.
As the Federal Reserve meeting comes to an end, it is expected that the price of bitcoin may continue to move in a narrow range.
The market has already factored in expectations of a 25 basis point rate hike by the Fed this week and is closely watching for signals about future rate actions.
Until there is more data and confidence on inflation trends, the FOMC’s rate decision will remain uncertain, which could affect bitcoin’s ability to break out of the $31,500 level in the near term.
Investors will be closely analyzing the Fed’s statements for any potential impact on the cryptocurrency market.
Bitcoin halvings happen in blocks less than 40,000
On Monday, the bitcoin network achieved a significant milestone by reaching block 800,000, marking a turning point in the evolution of the world’s largest cryptocurrency.
According to bitcoinblockhalf.com, the achievement also shows that the next bitcoin halving event, which is scheduled to occur at block 840,000 and will halve miners’ earnings, is now less than nine months (or about 40,000 blocks) away.
Historical data suggests that bitcoin halvings have played a role in price increases; It is important to consider that the cryptocurrency market is highly complex and subject to many influencing factors.
Therefore, the exact impact of the halving on BTC price remains uncertain and may be affected by various dynamic elements in the market.
bitcoin price prediction
Major cryptocurrency bitcoin declined heavily and reached the level of $28,850.
However, the recent close of a Doji candle just above this critical level indicates a possible weakening of the bearish bias.
Additionally, the presence of both a doji candle and a spinning top candle near the $28,800 level support the bullish trend or the possibility of a bullish correction.
Besides, the Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) indicators remain in the oversold zones, increasing the chances of a bullish reversal.
Therefore, it is necessary to closely monitor the $28,850 level, as a break above it could lead bitcoin to target the immediate resistance level of $29,500.
This resistance level is aligned with the 50-day exponential moving average and was previously an important support and double bottom level on July 24.
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 the $29,900 or $30,300 levels.
Traders and investors should remain vigilant for further price movements to assess the potential for a bullish breakout or further bearish pressure on the price of bitcoin.
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