BTC/USD Tests Two-Month Lows
The price of Bitcoin (BTC) plummeted to its lowest level since June 21st, as fears of inflation in the United States resurfaced. Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD dropped to $28,300.
Fed's July Meeting Rattles Crypto Markets
The downside in Bitcoin came after the United States Federal Reserve released the minutes of its July meeting, where members of the Federal Open Market Committee expressed concerns about elevated inflation. This led to worries that further interest rate hikes might be necessary.
The bearish reaction from Bitcoin and altcoin traders caused BTC/USD to fall below key support levels, including the 21-week and 100-day simple moving averages (SMAs) at $28,600 and $28,570, respectively.
Bitcoin's Trading Range Under Pressure
Bitcoin also tested the lower boundary of its multi-month trading range, a level highlighted by popular traders Daan Crypto Trades and Crypto Tony. Traders reacted to the price drop by shorting Bitcoin, with Crypto Tony targeting $28,000 as the first key level to watch for.
Uncertainty Surrounds Next FOMC Meeting
Although some traders expected higher interest rates in the next FOMC meeting in September, the odds of the Fed keeping rates unchanged remained near 90% after the release of the minutes, according to CME Group's FedWatch Tool.
Analysts were divided on the inflation outlook, with Caleb Franzen from Cubic Analytics arguing that disinflation, rather than inflation, was showing sticky behavior. He believed that market returns and an uptrend could continue, as long as disinflation and stronger economic data persisted.
It's important to note that this article does not provide investment advice. Readers should conduct their own research and make informed decisions when it comes to investing and trading.
