On February 22nd, Bitcoin experienced further drops in its value, following a recent downward trend that started ahead of the latest release of the Federal Open Market Committee (FOMC) minutes.
As investors anticipated potential changes in monetary policy from the FOMC, traders became more cautious, protecting their profits by selling off their Bitcoin holdings. This resulted in Bitcoin’s price slipping, despite a recent rise to a multi-month high.
On Wednesday, Bitcoin (BTC) continued its downward trend as investors braced themselves for the Federal Open Market Committee (FOMC) minutes report. The FOMC report is highly anticipated as it is expected to provide insights into the current state of the US economy, especially following the recent 25-basis-point hike.
Market analysts are closely monitoring the report for any indications of changes in monetary policy that may impact the cryptocurrency market. As a result of this anticipation, the BTC/USD pair fell to an intraday low of $23,902.54 on Wednesday, marking a significant drop from its high of $24,824.10 reached less than 24 hours prior.
Bitcoin’s recent decline is attributed to two key factors: the 14-day relative strength index (RSI) dropping below a crucial support point of 61.00 and the cryptocurrency’s price falling below the $24,200 mark. As a result, investors have grown increasingly cautious, leading to bearish market sentiment.
The RSI, which is a popular technical analysis tool used to measure the strength of a cryptocurrency’s price action, is currently tracking at a reading of 59.24, marking its weakest point since February 14. This indicates a potential loss in momentum for Bitcoin, which may result in further price declines in the short term.
However, there may be some hope for remaining bulls in the market, as there is a potential floor at 58.00, which could provide some support to the cryptocurrency’s price.
Bitcoin’s future is heavily dependent on these price levels
According to Ali Martinez, a well-known analyst, Bitcoin is currently facing a critical juncture that hinges on two major support areas. Martinez cites IntoTheBlock’s In/out of the money price indicator, which highlights that the first crucial support range lies between $22,659 and $23,325.
Within this range, 1.41 million addresses have already purchased a total of 711,550 BTC, making it a significant level of support. The second critical support area identified by Martinez is between $20,426 and $21,167, where 933,690 addresses have bought 542,160 BTC.
According to the technical chart analysis, the $23,300 level holds significant importance, which is supported by this analysis. Observing the 4-hour chart of Bitcoin reveals that the price level of $23,300 is crucial. If Bitcoin fails to maintain its current support at $23,867, it appears that the price may fall below the range high, leading to a sweep of the low. As a result, to gain an advantage, Bitcoin bulls must protect the $23,300 price level
The bulls may have a strong chance of winning the ongoing battle, and one compelling reason for this is the increasing popularity of Binance Futures. This cryptocurrency trading platform has been gaining more attention in recent times, especially given the current market correction.
According to the latest data, 58.59% of all accounts on Binance Futures have taken a long position in the last four hours, which is a significant increase from the 48.53% recorded yesterday
This drop in value reflects a general sense of uncertainty among investors, who are increasingly cautious as they await the outcome of the FOMC minutes. It remains to be seen whether Bitcoin will rebound or continue its downward trend, depending on the report’s findings and the market’s reaction to it. If the bulls manage to hold the price above this level, it could help ease the current bleeding in prices. Nonetheless, the market remains volatile, and it is challenging to predict with certainty the direction that Bitcoin’s price will take in the coming days
Ken Emmanuel is a Blockchain Content writer, a Web3 Enthusiast and a Social Media Management Strategist, he likes writing educative contents to help people gain more knowledge and get inspired. The growth of any organization he work with is always his priority. He is a Geographer by profession and loves reading.