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Before that, the largest cryptocurrency by market capitalization was trading near $27,200 but then unexpectedly plummeted to $26,700, causing BTC to record a 2.17% drop over the past 24 hours.
Bitcoin peaked at $27,400 just before the European stock markets opened. For nearly two weeks, BTC has been range-bound between $26,500 and $27,500. Investors worry about ongoing crypto regulatory issues that have reduced market liquidity and macroeconomic uncertainties, including the recent US debt ceiling standoff.
The market was further bewildered by the announcement that the latest data on US inflation, based on the Consumer Price Index, stayed below 5% for the first time since early 2021. However, it remained well above the target 2% of the Federal Reserve.
If Bitcoin opens and closes below the $26,500 – $26,600 range, it could indicate a downside breakout from its sideways trend. This could lead to a further drop towards the intermediate support at $25,300 and potentially a drop to $24,000 shortly after that.
24h BTC price chart. Source: CoinMarketCap
On the other hand, positive developments related to the US debt crisis could exacerbate the impact of the Fed’s pause in interest rate hikes.
In terms of short-term targets, the first resistance is around $28,000. If Bitcoin breaks through this level, the $29,000 – $29,600 range will be key before approaching $30,000.
Facing a correction in BTC, the 2nd largest cryptocurrency by market Ethereum (ETH), and other altcoins also recorded slight declines.
However, investors can also be optimistic about the continued downtrend in the data from the macro market, which could positively impact the crypto market as it will signal a reduction in inflationary pressures. However, the main focus remains on the risk of US default and the decision on the debt ceiling.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.