The price of Bitcoin (BTC) has been stuck in a narrow trading range for several days, including on August 2nd.
Why is Bitcoin price stuck?
Bitcoin price fell nearly 1% to around $29,500 on the day. However, this downward movement is part of a flat market trend that began a week ago, with the price trading between $28,850 and $29,660.
This sideways trend followed Bitcoin’s 4% drop below $30,000 last week, which was mainly due to the Federal Reserve’s interest rate hike. Historically, rate hikes have had a negative impact on non-yielding cryptocurrencies like Bitcoin.
Despite this, Wall Street economists predict that there could be a rate hike pause at the next Fed meeting in September. This expectation may be preventing Bitcoin from dropping below $29,000.
On the other hand, Bitcoin is struggling to stay above $30,000, which is a psychological resistance level. This struggle is influenced by broader market risks, including regulatory uncertainty surrounding Binance, the world’s largest crypto exchange by volume, and a recent decentralized finance exploit that cost $47 million.
The conflicting factors in the Bitcoin market have coincided with a decrease in institutional interest. According to CoinShares’ weekly report, investors withdrew approximately $19.4 million from Bitcoin-based investment funds in the week ending July 28th.
“93% of the outflows were from long-Bitcoin investment products, while short-Bitcoin saw its 14th consecutive week of outflows totaling $3.1 million,” wrote James Butterfill, an investment strategist at CoinShares.
Bitcoin price outlook for August
From a technical standpoint, Bitcoin is currently holding above its 50-day exponential moving average (50-day EMA) and aiming for a close above $30,000, which is its immediate resistance level.
If the price breaks above $30,000, there is a high likelihood of Bitcoin rallying towards $31,500, a local peak level, in August.
This upside target remains valid as long as Bitcoin trades above its multimonth ascending trendline support. However, if it decisively breaks below the 50-day EMA and the ascending trendline, there is a risk of Bitcoin crashing towards its 200-day EMA near $27,000, which served as support earlier this year.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
- The price of Bitcoin has been stagnant and trading within a narrow range.
- Bitcoin’s price fell due to the Federal Reserve’s interest rate hike.
- Regulatory uncertainty and market risks are keeping Bitcoin’s price from rising.
- There has been a decrease in institutional interest in Bitcoin.
- In August, Bitcoin may rally towards $31,500 if it breaks above $30,000.
- However, if it breaks below the 50-day EMA and the ascending trendline, it could crash towards $27,000.