Daily Price Outlook
The BTC/USD pair is currently trading at 29,856, marking a 1.46% decrease in the last 24 hours. While the price of Bitcoin had previously surpassed $30,000 last week, it has since declined due to mounting expectations of another interest rate hike by the Federal Reserve. This has consequently put pressure on risky assets, including Bitcoin.
US Macroeconomic Data and Federal Reserve Rate Hikes
The report released on Friday, April 14th indicated that US retail sales decreased by 1% in March, which was worse than the anticipated 0.5% decline. The drop was attributed to fewer people purchasing vehicles and other expensive items, signaling a slowdown in the economy towards the end of the first quarter due to increasing interest rates.
As inflation gradually falls and interest rates rise, it has become more challenging for consumers to make both smaller and larger purchases, leading to subdued sentiments.
However, the University of Michigan's (UoM) Consumer Confidence Index showed a minor improvement in consumer mood in the US, increasing to 63.5 in early April, slightly higher than the market consensus of 62. The initial response to this news resulted in a slight increase in the US Dollar Index, with DXY rising by 0.13% to 101.68.
The retail figures indicate a slowing economy, which leads to speculation that the Fed will increase interest rates in May. Furthermore, Fed Governor Christopher Waller, who advocated for more rate increases on Friday, noted that controlling inflation remains a challenge, as it is still "far too high."
As a result, the market expects the Federal Reserve to hike rates by 25 basis points on May 2nd-3rd, before an anticipated cut in June. This shift may cause investors to favor traditional assets like stocks over Bitcoin, which is a crucial factor that has prevented a further rise in the price of BTC/USD.
Drafting Legislation for Stablecoin Regulation
On April 15th, the US House Financial Services Committee released the first draft of its stablecoin bill. The bill, which defines the legal basis for stablecoins in the US, was made available in the House of Representatives document repository a few days before the April 19th hearing.
The proposed bill may have an impact on Circle and Tether, two stablecoin issuers, as it would require non-bank issuers to register with the Federal Reserve and provide a framework for stablecoins. Additionally, the bill discusses central bank digital currency (CBDC) and urges more investigation into digital dollars.
By taking significant steps towards guaranteeing secure digital currency support and operation on the internet, the US has shown a proactive attitude towards meeting regulation. This may have an impact on the broader cryptocurrency market by increasing regulation and scrutiny, which could influence investor confidence.
Some analysts suggest that institutional investors seeking regulatory clarification may adopt cryptocurrencies more frequently, which could benefit BTC/USD.
Daily Technical Levels:
Pivot Point: 30322
BTC/USD – Technical Outlook
During the previous week, the price of the BTC/USD pair picked up momentum, surpassing the $30,000 and $30,500 levels. BTC even briefly crossed the $31,000 threshold before encountering resistance from bearish forces. This led to a downward reaction, pushing the price below the $30,500 support area.
Bitcoin's value fell under the $30,250 support zone, reaching as low as the $29,800 area. It formed a low near $29,777 and is now in a consolidation phase. Currently, Bitcoin trades beneath $30,500 and the 100 hourly Simple Moving Average.
Should Bitcoin fail to overcome the $30,400 resistance, its downward trend may persist. The immediate support level on the downside is close to $30,000.
The subsequent significant support is around the $29,800 area. If the price breaks below the $29,800 support and closes beneath it, this could drive the value toward the $29,500 support level. Further declines might push the price toward $29,000.
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