The value of Bitcoin today is approximately $26000, and after the Federal Reserve issued a tough message, the price of Bitcoin has fallen by 4% in the past week.The price of Bitcoin remained above $26000 on September 25th and continued to show weakness after the Federal Reserve's interest rate decision last week
The value of Bitcoin today is approximately $26000, and after the Federal Reserve issued a tough message, the price of Bitcoin has fallen by 4% in the past week.
The price of Bitcoin remained above $26000 on September 25th and continued to show weakness after the Federal Reserve's interest rate decision last week.
Will the Federal Reserve push down the price of Bitcoin?
On September 21st, Federal Reserve officials decided to keep interest rates unchanged. However, predictions released after the Federal Reserve meeting indicate that most officials tend to raise interest rates again in 2023. Since then, BTC prices have fallen by 4.25%.
BTC/USD Daily Price Chart
Recently, it has been proven that the rise in interest rates is unfavorable compared to non income assets such as Bitcoin.
On the contrary, they have helped increase investors' interest in safer assets such as the US dollar.
Therefore, the 20-day average correlation coefficient between Bitcoin and the US dollar index (DXY) has dropped to -0.73, the lowest level since September 2022, indicating an increasingly intensifying reverse relationship.
Weekly correlation coefficient between BTC/USD and DXY
On the other hand, bulls are hoping that the US Securities and Exchange Commission (SEC) may approve spot Bitcoin Exchange Traded Funds (ETFs) in October. The biggest argument is that the approval of the first gold ETF in 2003 resulted in gold prices soaring by over 300% in the following years.
These factors offset each other, resulting in one of the least volatile periods for Bitcoin. The historical volatility index of Bitcoin, which measures the volatility of BTC prices at one minute intervals within 30 minutes, has dropped to 13.39 this month.
In contrast, the peak of the index appeared at 190 points in February 2018.
Monthly Performance of Bitcoin Historical Volatility Index
Long term Bitcoin emotional stability
Nevertheless, the Fed's tough stance has not shaken the sentiment of long-term Bitcoin holders (LTH) based on unrealized net profit and loss (NUPL) readings (in the blue area below).
Any NUPL value above zero indicates that the network is enjoying overall net profit, while a value below zero indicates that the network is facing net loss. Currently, BTC investors who hold tokens for over 155 days are still profitable in 2023.
In other words, most LTH entities have not yet sold their BTC holdings in 2023 and may expect higher Bitcoin prices in the future.
Unrealized net profit and loss of Bitcoin by group
On the contrary, the NUPL (red area) of short-term holders (STH) who typically respond quickly to market fluctuations significantly decreased in 2023. This indicates that STH or 'speculators' have been ensuring profits and accumulating BTC at higher prices.
Bitcoin Trading Expert: BTC Bull Market Continues to Advance
Meanwhile, multiple Bitcoin chart analysts predict that Bitcoin will continue its bull market in late 2023 and throughout 2024
For example, anonymous analyst RektCapital sees the continued trend of flat Bitcoin as a buying opportunity before Bitcoin halves in mid-2024. Analysts believe that the previous halving event was a bullish catalyst.
Bitcoin/USD Weekly Price Chart
Similarly, popular market analyst Mustache cited the classic speaker model to predict a bull market in the Bitcoin market, with an upward forecast of over $100000.
Bitcoin/USD Weekly Price Chart
Short term bearish bias
However, in the short term, with the emergence of potential head and shoulder (H&S) patterns, Bitcoin pricing technology is issuing warnings.
When prices form three consecutive peaks above the common support line (known as the neckline), H& The S mode is formed. The middle peak is called the head, which is higher than the other two peaks: the left shoulder and the right shoulder.
When the price falls below the neckline and reaches a level equal to the maximum height between the head and neckline, H& The S form will disappear. As shown in the figure below, Bitcoin has started to fall below the neckline level of around $26420.
BTC/USD Four Hour Price Chart
Due to this classic technical setting, the bearish target for BTC prices will be around $25400 at some point in October.
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