- Bitcoin dipped below $65,000 at the start of August, marking a significant decline from recent highs.
- The drop follows the US Federal Reserve’s decision to keep interest rates unchanged at 5.25–5.5%.
The Bitcoin (BTC) market displayed selling pressure soon after the US Federal Reserve’s meeting on Wednesday, July 31. The cryptocurrency’s value fell by 6% and landed in the $63,000 zone. This drop marks the first time Bitcoin has slipped below $65,000 since July 25, according to CoinMarketCap data.
Federal Reserve Chair Jerome Powell announced that interest rates would remain unchanged at 5.25–5.5%, with a 25 basis point cut in September based on July’s inflation data aligning with expectations. This announcement triggered a volatile reaction in the Bitcoin market, with BTC dipping to $63,720 and briefly rebounding to $65,075 before trading at $64,247 at press time.
The market reaction to the Fed’s announcement triggered $61.86 million in Bitcoin liquidations in the past 24 hours. Concurrently, the long-anticipated repayments from the defunct crypto exchange Mt. Gox were ongoing. Mt. Gox disclosed that it had repaid assets to over 17,000 creditors.
Further, according to the blockchain analytics firm Arkham Intelligence, the exchange transferred over $7.63 billion in BTC on July 31. These transactions were believed to be directed to cryptocurrency exchanges–(Mt. Gox trustees)
If people begin selling their repaid BTC, the market could experience increased volatility and downward pressure on Bitcoin’s price. A surge in selling activity could lead to a temporary oversupply of BTC, driving prices down as traders react to the influx of coins.
Bitcoin’s Technical Indicators and Market Outlook
Despite the sell-off, market analysts predict that the recent price volatility could be temporary. Bitcoin might recover and test the $65,000 to $70,000 levels again, aiming to surpass the lower highs formed since mid-March 2024. Also, Bitcoin’s relative strength index (RSI) is currently at 33, indicating an “oversold” status and suggesting a potential buying opportunity.
Furthermore, a bullish crossover above $70,000 could signal the start of a new upward trend and push Bitcoin’s price close to its all-time high of $73,750. If this trend continues, BTC may rise to around $80,000.
However, if the bulls fail to sustain momentum above $65,000 and break the initial resistance, Bitcoin could correct to key support levels at $61,000 or $60,000. A breakdown below these levels might lead BTC to revisit the $58,500 zone, placing it in bearish territory and presenting an opportunity for “buy the dip” strategies.
