Bitcoin (BTC) hit a two-month low on Aug. 17 as U.S. inflation spooked the cryptocurrency market again.
Bitcoin price is about to exit a months-long corridor
Data from Cointelegraph Markets Pro and transaction view Confirming the lowest BTC price level since June 21, BTC/USD fell to $28,300.
Downtrend after Fed rate cut published Minutes of the July meeting discussing future monetary policy.
Members of the Federal Open Market Committee (FOMC) are concerned that without further rate hikes, inflation could remain elevated, something risky assets don’t want going forward.
“Participants discussed several risk management considerations that could affect future policy decisions,” the minutes read.
“With inflation remaining well above the Committee’s longer-run objective and the labor market remaining tight, most participants continued to see significant upside risks to inflation that would likely require further tightening of monetary policy.”
While the Federal Reserve also expressed “uncertainty” about the impact of existing monetary tightening, Bitcoin and altcoin traders reacted pessimistically to its language, causing BTC/USD to break through several recent support levels.
These include the 21-week and 100-day simple moving averages (SMAs) at $28,600 and $28,570, respectively.
Bitcoin also challenged the lower bound of its multi-month trading range, a point previously highlighted by popular traders Daan Crypto Trades and Crypto Tony.
“Bitcoin has lost $28,800 now, so I would consider shorting Bitcoin now while we’re still below $28,800,” said the latter Tell Got X subscribers that day and added that $28,000 was his first goal.
Markets keep bets on rate hike pause
Meanwhile, not everyone is convinced that the next FOMC meeting in September will yield higher interest rates.
Related: Bitcoin Speculators Now Own Least BTC Since $69k All-Time High
according to According to CME Group’s FedWatch tool, the probability that the Fed will keep current interest rates on hold remained at nearly 90% after the data was released.
Analysts are also far from unanimous.in a forecast Last week, Caleb Franzen, senior analyst at Cubic Analytics, said it was deflationary rather than inflationary, showing “sticky” behavior.
In his view, “deflation + strengthening earnings + strengthening economic data + the end of the rate hike cycle is the perfect recipe for market returns and the development of an uptrend.”
“While these conditions may change in the future, I have not seen any evidence that it has.”
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