Crypto Market Undergoes Correction, Caution Advised
After Friday’s euphoria following Powell’s announcement, Bitcoin and other crypto are failing to maintain support levels, with BTC dropping below $115,000 and the July monthly closing price of $115,800. What does this mean?
Mixed Signals for Bitcoin and Ethereum
- Bitcoin is slightly correcting by 0.8%, falling below the $115,000 mark. Over the week, the flagship cryptocurrency has lost nearly 3%.
- Ethereum shows a modest gain of 1%, maintaining its position near its all-time high of $4,900. Over 7 days, Ether has increased by 6%.
The mere mention of a rate cut by the Federal Reserve triggered a bullish frenzy. However, analysts at Santiment warn against excessive expectations.
“Historically, such excitement around a bearish scenario can signal a local peak,” emphasizes the analytics firm.
Social media data indeed shows that mentions related to the Fed and interest rates have reached an 11-month high. This suggests that the current euphoria might be excessive.
Market Caution: Levels to Watch
While prospects of monetary easing fuel optimism, technical indicators call for caution. The Fear and Greed Index’s return to the neutral zone confirms this sentiment.
Liquidity flows remain crucial in determining the long-term trend for Bitcoin and crypto. Savvy investors should stay alert to macroeconomic signals to navigate the coming weeks confidently.
According to trader Killa, if Bitcoin fails to maintain $115,000 this weekend, it will return to its Fair Gap Value at approximately $113,463. This level will be preferable for scalp traders, which could trigger a rebound.
However, if a rebound occurs, caution should be maintained with cryptos until BTC breaks through $118,500. Nevertheless, reclaiming $116,700 would already be a first step toward a bullish recovery.
Conversely, if $112,000 is lost again, we should expect a return to between $108,000 and $106,000 at minimum.
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