empty
03.08.2023 01:43 PM
Bitcoin's prospects may depend on US recession probability

The cryptocurrency market and Bitcoin have undergone significant changes after the Fed's decision on its key interest rate in the July meeting. The cryptocurrency broke through $30,000 and entered a new price range of $28,500-$29,700. Bulls have been trying to regain control and push the price above $30,000, but they barely succeeded.

This image is no longer relevant

The recent bullish momentum occurred on August 1 when bulls defended the key support level at $28,500. The price formed a bullish engulfing pattern and reached the psychological level of $30,000. However, the bullish momentum could not be sustained as bears managed to absorb the buying volumes and push the price back into the range of $28,500-$29,700 on August 2.

The role of the economic situation in the US

The economic situation in the US has historically influenced Bitcoin due to the Fed's policies regulating global economic liquidity. The recent drop in BTC/USD quotes was also tied to the economic situation in the US. The downgrade of the world's largest economy's credit rating to AA+ and statements from the US Treasury Secretary led to a significant strengthening of the USD index and a 4% rise in Treasury bonds.

This image is no longer relevant

This, in turn, caused a decline in most financial instruments, including BTC. As of August 3, the cryptocurrency is trading at $29,100 with trading volumes nearing $14 billion. Analysts from Grayscale suggest that the crypto market's prospects depend on the likelihood of a recession in the US. At the same time, Fannie Mae believes this may occur by the end of 2023.

This image is no longer relevant

In the short term, the situation around Bitcoin does not look optimistic due to the successful earnings season. As per Compound's data, 58% of S&P 500 companies have already reported on SP&500 EPS showing an 8% year-over-year growth, which led to reduced trading activity in the crypto market.

Accumulation of volumes continues

Despite the temporary market calm, the fundamental value remains strong, as evidenced by the continued active accumulation of BTC volumes by major investors. Whales, in particular, have resumed accumulation, which often leads to significant price movements. Overall, the number of BTC addresses with non-zero balances has reached a record 47.9 million.

This image is no longer relevant

However, short-term profit-taking by individual traders and whales selling over 250,000 BTC negatively affected the price movement. Mainstream holders are now dealing with the consequences of these actions.

BTCUSD review

Regarding the BTC/USD pair, there was an impulsive movement aimed at establishing a price above the range of $30,000-$30,200, but it occurred with declining volumes, indicating a lack of strong buyers. The recent price decline to the current levels happened with increasing bearish volumes, leading to a bearish engulfing pattern.

This image is no longer relevant

The market remains bearish, and Bitcoin is expected to continue moving within the range of $28,500-$29,700, testing the lower boundary. The main short-term targets for bears are located near $28,500 and $27,500, while bulls aim to solidify above the area of $30,000-$30,200, although their efforts are hindered by low volumes.

This image is no longer relevant

Despite the bearish sentiment, there might be another bullish momentum by the end of the current week, as bulls have shown resistance despite the bears' strength. Market data, along with potentially positive reports from AAPL/AMZN, could provide a new impulse to the BTC market.

Conclusion

Bitcoin continues to react strongly to macroeconomic data related to the Fed's policies and inflation. The publication of key macroeconomic indicators always triggers volatility and significant price reactions. In the short term, low trading volumes and investors focus on the stock market's earnings season influence the consolidation movement of BTC. The outlook is bearish, with at least one test of $28,500, and further declines are possible.

Artem Petrenko,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

Trading Recommendations for the Cryptocurrency Market on June 12

Bitcoin and Ethereum experienced a notable pullback after another unsuccessful attempt to rally. Bitcoin could not retest its all-time high, and Ethereum could not surpass the $2900 mark. U.S. Treasury

Miroslaw Bawulski 09:10 2025-06-12 UTC+2

Solana spot ETF around corner

Right now, Solana is in the spotlight for traders. According to the latest reports, the US Securities and Exchange Commission (SEC) has requested that potential Solana ETF issuers submit amended

Jakub Novak 16:23 2025-06-11 UTC+2

The Crypto Winter Is Becoming a Thing of the Past

Bitcoin is showing strong growth and came within a step of reaching a new all-time high. However, it's important to understand that taking this final step will be quite challenging

Jakub Novak 10:18 2025-06-11 UTC+2

Trading Recommendations for the Cryptocurrency Market on June 11

Bitcoin is undergoing a correction following yesterday's rapid surge to the $110,500 area, while Ethereum remains vibrant—having gained over 6% yesterday and currently trading at $2,785. Given such a strong

Miroslaw Bawulski 09:01 2025-06-11 UTC+2

Bitcoin Resumes Growth — And There Are Reasons Behind It

Bitcoin has resumed its upward movement, pulling other cryptocurrency assets along with it. Today's rise during the Asian session clearly points to a breakout of several major technical resistance levels

Jakub Novak 10:12 2025-06-10 UTC+2

Trading Recommendations for the Cryptocurrency Market on June 10

Bitcoin has finally broken through the $107,000 level, and during today's Asian trading session, it surged rapidly to around $110,000, stopping just a step away from updating its all-time high

Miroslaw Bawulski 09:30 2025-06-10 UTC+2

Trading Recommendations for the Cryptocurrency Market on June 9

Bitcoin has reached its recently favored level of $106,500 again, even though Friday's U.S. labor market data did not support this rise. Ethereum also strengthened over the weekend, but today's

Miroslaw Bawulski 09:21 2025-06-09 UTC+2

Technical Analysis of Intraday Price Movement of Litecoin Cryptocurrency, Thursday June 05, 2025.

On the 4-hour chart of the Litecoin cryptocurrency, there is an appearance of a Descending Broadening Wedge pattern which indicates that there will be a strengthening in the near future

Arief Makmur 09:53 2025-06-05 UTC+2

Trading Recommendations for the Cryptocurrency Market on June 5

Bitcoin is struggling to reach $106,000 less frequently and is dropping toward $104,000 more often, which is a rather concerning short-term signal. Sooner or later, this pattern could lead

Miroslaw Bawulski 09:20 2025-06-05 UTC+2

Trading Recommendations for the Cryptocurrency Market on June 4

Bitcoin and Ethereum keep trying to break through key resistance levels but continue to face the same obstacle. On one hand, this suggests a cautious approach by major market players

Miroslaw Bawulski 09:19 2025-06-04 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.