Bitcoin (BTC) fell below $21,000 for the first time in eight days on July 26 as Wall Street prepared to decide on anti-inflation policy in the United States.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Fed Tensions Test Market Resolution
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD ended a period of sideways movement on Wall Street, reaching as low as $20,788 on Bitstamp.
Against its highs of $24,280 on July 20, the pair is now down more than 14% as nerves build up across risky assets in anticipation of the Federal Reserve’s decision on interest rates due on July 27.
The higher the Fed policy rate, the more problematic the outlook will be for crypto investors as more tightening means more conservative conditions prevailing throughout the economy.
“BTC lost the higher low, which was a lower time frame technical trend,” he told his Twitter followers along with an illustrative chart.
Elsewhere on the macro front, the International Monetary Fund (IMF) released its World Economic Outlook in July 2022, forecasting a significant slowdown in global growth, which should average 3.2% this year and 2.9% in 2023.
“The risk of recession is particularly evident in 2023, when growth is expected to slow in many economies, household savings accumulated during the pandemic will decline, and even small shocks can cause economies to stall,” the report said.
“For example, according to the latest forecasts, the United States will achieve real GDP growth of only 0.6 percent in the fourth quarter of 2023 year-on-year, which will make it increasingly difficult to avoid a recession.”
Looking at the daily timeframes, famous trader and analyst Rekt Capital warned that with the Fed event continuing, Bitcoin has already lost its upward trend.
“BTC lost the higher low, which is a lower time frame technical trend,” he told his Twitter followers on the day.
“The trend has shifted.”
Another post described the current pullback as a logical complement to Bitcoin’s abandonment of the 200-week moving average level as support after its brief recovery last week.
“Patience is a virtue,” said fellow merchant and analyst Anbisa.
“Wait for the reversal pattern to re-enter. There is no setting for an entry at $21.6K, so we remain patient.”
Anbasa also said there was “no need for FOMO” in the markets at current prices.
Are you still in line for a million dollars?
Others had reason to be cautiously optimistic about bitcoin, with condemnation increasing in line with the timeframes being watched.
