The recent price action of Bitcoin has shown signs of weakness as it failed to break through a critical resistance level. Today’s trading session has been accompanied by selling pressure, indicating a potential re-test of crucial support levels. However, this could also trigger a bounce for the cryptocurrency, according to fresh data. This article examines the current state of Bitcoin’s price and analyzes the influence of macroeconomic forces on its performance.
As of this writing, Bitcoin is trading at $26,650, experiencing a 2% loss in the last 24 hours. Over the past seven days, BTC has displayed sideways movement and underperformed compared to other cryptocurrencies like XRP and TON. XRP recorded a 5% profit, while TON saw a significant 25% profit during a similar period. These relative underperformances suggest that Bitcoin’s price may face additional challenges in the near future.
A fire chart shared by crypto research firm Material Indicators reveals the most significant liquidity levels for the BTCUSDT trading pair on Binance. The chart indicates that liquidity on the Binance orderbook for Bitcoin is currently “thin.” This suggests that traders on this venue have been selling the cryptocurrency and moving liquidity below the present levels.
Analysts highlight a “small buy wall” around $24,700, which represents a crucial support level for Bitcoin. Defending this level is crucial to prevent further downside price action. However, liquidity around this critical level is low. To counter this, bulls may need to inject capital to defend this key support level. Successful defense of the $24,700 level could bring about a rally in Bitcoin’s price, allowing it to reclaim lost territory. On the flip side, a failure to defend this support level may invite more bearish pressure, potentially pushing the price down to critical support levels around $23,000 and $22,000. These lower levels display even less liquidity than $25,000, suggesting a potential deeper correction.
Additional data provided by trading desk QCP Capital highlights the significant impact of macroeconomic forces on Bitcoin’s price. Recently, the US Federal Reserve (Fed) made an unexpected “hawkish” move, which had a bearish impact on legacy markets. This move affected the Nasdaq 100 and rates markets, causing them to break key levels. QCP Capital suggests that this macroeconomic event could seep into the crypto markets and potentially push Bitcoin’s price lower.
According to QCP Capital, reflexivity may take over with a bearish thesis driving Bitcoin’s price even lower alongside other stretched macro markets like the Nasdaq. Although Bitcoin may have a lower beta compared to these other markets, the influence of macro factors cannot be ignored.
Bitcoin’s recent price rejection and selling pressure indicate potential challenges ahead. Defending critical support levels and injecting capital to increase liquidity will be crucial for Bitcoin to regain lost momentum. Additionally, the influence of macroeconomic forces, such as the recent hawkish move by the US Federal Reserve, cannot be disregarded. Traders and investors must closely monitor both technical levels and macro factors to make informed decisions in the volatile cryptocurrency market.
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