Bitcoin, the leading cryptocurrency, has dropped its price dramatically to a 30-day low, trading for $66,169 due to market volatility.
The recent drop in Bitcoin‘s prices alerted investors; while analysts are trying to predict its next move, some are considering it as a temporary drop; however, some are concerned, and some of them think that it can further drop its price to make a deep correction.
There are multiple factors affecting the price of Bitcoin, including the United States inflation rate which weekend the investor’s sentiments and the rising U.S. dollar, has created a complex outlook for Bitcoin’s immediate future.
Weaker Consumer Sentiment can make the Bitcoin Price Drop Further
The University of Michigan rolled out data on customer sentiment, indicating that customer sentiments dropped to a 7-month-low to 65.6 in June from 69.1 in May. This declining confidence signals increasing worries about the economic future and may discourage investment in riskier assets like Bitcoin.
Inflation expectations remain high, exceeding the Federal Reserve’s 2% target. As projected by the authorities, the inflation rate can remain at 3.3% for the next years. For the next 5 years, a drop in inflation rate is expected to reach the mark of 3.1%
The Fed’s cautious approach, as indicated by Chair Jerome Powell, suggests that interest rates may remain elevated for an extended period. This reduces market optimism and continues to put downward pressure on Bitcoin prices.
BTC Under Strain: Dollar Strength and Whale Activity in Focus
The U.S. dollar’s rise, driven by strong economic data and the Federal Reserve’s careful approach, is pushing Bitcoin’s price down. This trend reflects the dollar’s growing appeal as a safe-haven investment, diverting funds from alternative assets such as Bitcoin.
The anticipation of higher interest rates, which typically boost the dollar by attracting foreign investments, also reduces Bitcoin’s appeal. Unlike traditional investments, Bitcoin doesn’t provide interest payments or dividends, making it less appealing in a high-interest-rate environment.
Although Bitcoin is facing pressure, big whales are purchasing it and showing strong confidence in the future. One of the whales acquired 20,600 BTC worth of $1.38 billion in the 24 hours, which makes it the largest purchase since February.
The current Bitcoin price is predicted to be a buying zone as more whales are investing in it to gain long-term profits.
Bitcoin Price Forecast
At the time of writing, Bitcoin is trading at $66,169 slightly above the rotation mark of $67,050, indicating a bearish sentiments. The Bitcoin follows an immediate resistance at $68,500, followed by $70,000 and $71,700.
While viewing a bearish trend, immediate supports stood at $65,000, and some further supports at $63,950 and $63,000.
The 50-day Exponential Moving Average (EMA) sits at $67,900, signaling a declining trend as the BTC price is below this level.
The Relative Strength Index (RSI) is at 40, also indicating a sign of deep correction.
