Bitcoin fell 1.93% from July 21 to July 28 to US$29,199 at 6:30 p.m. Friday in Hong Kong. The world’s largest cryptocurrency by market capitalization has been trading under the US$30,000 mark for most of the week. Ether lost 1.02% over the week to US$1,867.
This week, Bitcoin lost the US$30,000 support level on Sunday, after briefly touching US$30,291, and remained below US$30,000 since.
“The fact that Bitcoin is trading below US$30,000 is due to several factors, including a short-term lack of positive catalysts and the fact that the ETF narrative is slowly fading as there are currently no new developments,” Jonas Betz, crypto market analyst and founder of consultancy firm Betz Crypto, told Forkast.
“In addition, long positions in leveraged futures worth US$30 million were liquidated on July 24, amplifying Bitcoin’s sudden price decline.”
The U.S. Federal Reserve raised interest rates by 25 basis points to between 5.25% to 5.5% on Wednesday, in line with market expectations, putting borrowing costs at the highest level in 22 years. But investors remained optimistic after Fed Chair Jerome Powell indicated that its next interest rate decision will be data-dependent, meaning that it could pause the rate hiking cycle in September.
“Interest rates now stand at a 22-year high, which could ultimately strengthen the dollar. That would be bearish for Bitcoin and crypto prices in the short term. Traditionally, when central banks raise interest rates, it can have a negative impact on investor sentiment across various asset classes,” Lucas Kiely, chief investment officer of digital asset platform Yield App, told Forkast.
“Higher interest rates could continue to increase the costs of borrowing, thus reducing liquidity in the crypto market. In recent history, the crypto market has been generally immune to macroeconomic events.”
