Bitcoin sell-off continues as BTC approaches $ 31,000 ahead of Powell’s speech

Bitcoin (BTC) price continued its downward trend on Wednesday ahead of Federal Reserve Chairman Jerome Powell’s testimony.

The spot BTC / USD exchange rate fell to a 17-day low of $ 31,600 after falling 3.46% that day. Meanwhile, CME futures pegged to the pair fell 3.41% to $ 31,515, extending losses for the week to 9.5%.

Bitcoin rebounded to $ 35,000 in early July as the bulls defended the $ 30,000 support before attempting any downward attempt.

Independent market analyst Will Clemente noted that companies with histories of low sales continue to absorb bitcoin at lower rates from speculators, adding that the strategy would effectively be phased out.

“Without a speculative event, in my humble opinion, it is more a question of ‘when’ ‘the accumulation’ rather than ‘when’,” wrote Clemente.

“As soon as the process is completed, the market will experience a supply shock.”

But…

… Bitcoin sold out at $ 35,000, dropping to nearly $ 31,500 in 13 years in the last trading session on July 14th.

Specifically, the U.S. consumer price index rose 0.9% month-on-month in June 2021 and 5.4% from June 2020. Higher inflation indicators focus on Powell’s appearance before the House of Representatives Financial Services Committee on Tuesday at 9:30 a.m. EST.

The central bank chief hopes to clarify his opinion on the sustained rise in consumption-related inflation. In his earlier remarks, Powell suggested that the Fed should proceed cautiously unless it sees a “maximum recovery” in the US labor market.

As a result, Powell, with the help of a number of like-minded reluctant Fed officials, including New York office head John Williams, could cut the monthly purchase program by 120 strong US growth and high inflation.

The Fed’s restrictive tone coincides with the fall in the BTC price

Meanwhile, Evercore ISI economist Peter Williams predicted that a rise in the CPI would heighten tension among members of the Federal Reserve’s Open Market Committee.

He noted that some restrictive members may be calling for cuts as early as September but added that the Fed will generally wait and see as inflation is temporary.

For Bitcoin, the outlook remains mixed, especially after the cryptocurrency has failed to respond to inflation alarms in recent months that have stalled due to China’s crackdown on the crypto sector on anti-crypto tweets.

Fortune has reported that Bitcoin is moving “on its own”, ignoring recent spikes in major inflation indicators. This makes cryptocurrencies a questionable hedge against rising consumer prices.

Joel Kruger, forex strategist at London-based investment firm LMAX, thinks differently. The analyst noted that Bitcoin’s long-term outlook continues to be skewed in the opposite direction as there are “legitimate fears of rising inflation”.

“Another recession for SOME investors viewing Bitcoin as an emerging asset correlates with risk,” he said. tweeted End of the third day.

“In the short term, there could be more downward movement if stocks collapse. But ultimately, Bitcoin should be well supported in terms of long-term value proposition. “

Additionally, Greg Waisman, co-founder / COO of crypto infrastructure firm Mercuryo, offers a more telling outlook.

First, he noted that even with inflation rising, macro investors do not believe in the true value of Bitcoin. And second, he predicts that given its recent price spike, ether will be a better cryptocurrency compared to Bitcoin.

Waisman stated, “Bitcoin is the most expensive and well-known cryptocurrency, but it is not the current cryptocurrency.

Ethereum is the real king of cryptocurrencies. Investors will continue to push Bitcoin up and down at will. However, Bitcoin will again cross the $ 50,000 mark

Technical outlook

For now, lackluster volume and a two-month downward move keep Bitcoin in a bearish state.

Since May 20th, BTC / USD has been trending down within a descending parallel channel, recovering from its support trendline and falling back to test resistance. At the same time, the $ 30,000 to $ 32,000 area provided additional confluence of support.

The pair appears to be moving back to the lower trendline after the last retest of the channel’s upper trendline. However, the near-term goal in the current scenario is below $ 30,000 (towards the low in the second quarter of $ 28,732).

Conversely, a breakout north of the BTC / USD channel’s resistance trendline could trigger a target test of the 50-day simple moving average (50-day SMA; green wave) at USD 35,363. This area has seen a sell-off in recent sessions.