Digital Cryptocurrency, Bitcoin, experiencing a decline, now below the $110,000 mark, as the bullish market players struggle to maintain control.
In the ever-evolving world of cryptocurrencies, Bitcoin is currently navigating through a complex landscape. The ongoing uncertainty surrounding the Federal Reserve's actions and lingering inflation concerns are negatively impacting the sentiment towards Bitcoin.
Recent reports suggest that the U.S. jobs data indicates a cooling labor market, potentially leading to a Fed rate cut on Sept. 17. However, the Fed may only have room for a "one and done" rate cut due to inflation concerns. This uncertainty is causing a different reaction compared to the typical boost that risk assets, including Bitcoin, might usually experience from a rate cut.
Bitcoin slipped again on Thursday, according to BNC, as the macro backdrop includes gold shining and the Federal Reserve showing signs of wobbles. Gold, often referred to as "shiny rocks" in the context of its current performance, is currently outperforming both Bitcoin and stocks. This performance could indicate a shift in market sentiment away from Bitcoin and other cryptocurrencies.
The $110K level is considered "critical support" due to a heavy-volume trading zone, as per Swissblock. Losing this level may lead to a fast-track ticket towards the psychological $100K level. If Bitcoin can bounce from the $110K level, it will face resistance at $113.6K-$115.6K and $118K, according to optimists. Institutional investors and large cryptocurrency traders typically try to control Bitcoin around $113.6K/$115.6K if it loses the support level at $110,000.
Despite these challenges, the optimists believe that if Bitcoin can overcome these resistance levels, it could potentially rebound to higher levels. However, it's important to note that the ongoing inflation concerns and the uncertainty surrounding the Fed's actions are not helping crypto sentiment.
Markets are pricing in higher long-term inflation and more deficit spending, according to The Kobeissi Letter. This inflationary environment could potentially impact the value of Bitcoin and other cryptocurrencies in the long run.
As always, it's crucial for investors to stay informed and make decisions based on a comprehensive understanding of the market dynamics. The ongoing situation with the Fed rate cut and inflation concerns is a reminder of the complexities involved in the world of cryptocurrencies.
