The Crypto Market Reacts to Fed’s Decision
The crypto market has been influenced by the Federal Reserve’s decision to keep interest rates unchanged for September. As a result, Bitcoin’s price has dropped below the $27,000 support level after being rejected at $27,200. The delay in payouts by fallen exchange Mt. Gox has helped prevent further downside for Bitcoin, but there are speculations of a potential drop to the major support level of $25,000.
Bitcoin Price Correlation with US Dollar Index
The correlation between Bitcoin’s price and the US Dollar Index has reached a new milestone of zero, according to on-chain analytics platform IntoTheBlock. This lack of correlation raises questions about whether it is a bullish or bearish signal for Bitcoin. Furthermore, there is currently almost no correlation with any major indices.
Has Bitcoin Price Bottomed?
Investors have mixed sentiments regarding whether Bitcoin has bottomed or if it will need to retrace further before starting an uptrend for the next bull market tied to the miner reward halving in April 2024.
Potential Further Declines for Bitcoin
Based on the short-term outlook, it is likely that Bitcoin will experience further declines before making a significant jump towards the hurdle at $31,000. The seller congestion at $27,000 indicates that while the market structure improved in September, the uptrend lacked sustainable momentum.
Technical Indicators Point to Bearish Outlook
The Moving Average Convergence Divergence (MACD) suggests that a sell-off is the most likely outcome for Bitcoin. The Relative Strength Index (RSI) also supports a bearish outlook. Monitoring Bitcoin’s reaction to key levels such as $27,000 and the support areas at $26,000 and $25,000 will provide insight into its future direction.
Historical Analysis Indicates Possible Macro Higher Low
Crypto trader and analyst @rektcapital suggests that based on the 2018 bear market bottom, Bitcoin’s price has not yet reached its bottom. He compares it to the previous bull run in 2021, where Bitcoin revisited a macro higher low in March 2020. If history repeats itself, the current bear market could also form a macro higher low before the next bull market begins.
The Future of Bitcoin Price
The current stagnation in Bitcoin’s price may lead to a drop to $25,000 before potentially revisiting $20,000. This could be part of the trend leading up to the 2024/2025 bull market.
Hot Take: Uncertainty Surrounds Bitcoin’s Future
The crypto market is experiencing uncertainty as Bitcoin’s price reacts to various factors such as the Federal Reserve’s decision and historical analysis. The lack of correlation between Bitcoin and major indices raises questions about its future direction. Traders and investors are closely watching key levels and technical indicators to determine whether Bitcoin has bottomed or if further declines are expected. The coming months will be crucial in shaping Bitcoin’s path towards the next bull market.
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