Crypto Daily: Why watch stocks and Fed to predict BTC price

Aug 04, 2022
11:08
2 min reading

Choise.com team

It can no longer be denied that the price of Bitcoin is being heavily influenced by the macro environment. The stock market correlation had hit a new all-time high earlier in the year, and the crypto market is yet to decouple from it. Given this, Bitcoin investors react accordingly and pay attention to the stock market for a possible BTC price forecast.

Institutional investors are here

The call for institutional adoption had been loud throughout the last few years, and these big players had actually begun to move into the market. While this had come with a lot of positives for Bitcoin, such as increased demand, it had also inadvertently tied BTC price to the stock market, which these big players are very visible.

macro environment

Source: Arcane Research

So if institutional investors are forced to sell their stocks, as was recently seen, it also flows into Bitcoin. Hence, when there is forced selling in the stock market, there is also forced selling in crypto.

Rising interest rates affect Bitcoin

2022 has put the financial markets through a lot of hurt. The Fed has had to come up with new ways to combat this, which has led to a dramatic rise in interest rates.

These rising interest rates have been one of the major reasons behind Bitcoin’s decline. Recall that the decline in the crypto market had actually started when some big players in the space had failed, but it was further pushed forward when the Fed announced the March interest rate hike that moved the fund’s rate from 0% to 2.25%-2.5%.

This is why paying attention to the macro environment is important to try to predict the future of Bitcoin.

Bitcoin price analysis

Bitcoin price has managed to power through and retain its momentum above the $23,000 mark. Over the past week, the coin displayed bullish momentum. In the last 24 hours, Bitcoin showed minor appreciation, however, it has remained steady above its local support level.

Technical outlook of the BTC also suggested that the bulls have taken control. If Bitcoin price manages to move past the $24,000 price mark and trade there for a considerable period of time, then the bulls could garner further strength. The cryptocurrency has struggled to remain above the $24,000 price level for a long time.

Buyers also came back into the market and that helped Bitcoin to continue its bullish thesis. There is however always a possibility that Bitcoin might retrace back on its chart if it trades below the $24,000 mark for long enough. In that case, BTC might find support in between $22,000 and $21,000 over the next trading sessions.

It is now trading below the $23,200 level and the100 hourly simple moving average. There is also a key rising channel forming with support near $22,800 on the hourly chart of the BTC/USD pair. On the upside, bitcoin price is facing resistance near the $23,200 level and the 100 hourly SMA.

Source: BTCUSD on TradingView.com

Technical indicators

Hourly MACD – The MACD is now gaining pace in the bearish zone

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now near the 50 level

Major Support Levels – $22,800, followed by $22,500

Major Resistance Levels – $23,200, $23,500 and $24,180

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