{"id":5022,"date":"2024-08-02T05:35:01","date_gmt":"2024-08-02T05:35:01","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=5022"},"modified":"2025-05-14T09:47:12","modified_gmt":"2025-05-14T09:47:12","slug":"fed-pivot-bitcoin-aug-2024","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/chart-of-the-day\/fed-pivot-bitcoin-aug-2024\/","title":{"rendered":"Fed Pivot Speculations Drives Bitcoin Lower. What Gives?"},"content":{"rendered":"\n
On July 31, 2024, the Federal Reserve held its monthly FOMC meeting to clarify their thoughts on inflation and their interest rate decision. With the Fedwatch reading a 100% expectation for a rate cut in September, many investors were hoping for a dovish tone \u2013 and that is exactly what they got.<\/p>\n\n\n\n
Tackling a myriad of difficult questions, Chair Powell ultimately said three key statements that boosted the markets\u2019 confidence for a rate cut: <\/p>\n\n\n\n
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He said the economy was \u201cnormalizing\u201d and that the time for cutting rates \u201cis approaching\u201d.<\/li>\n\n\n\n
The jobs market was \u201cstrong but not overheated\u201d.<\/li>\n\n\n\n
Inflation was cooling down as per the Federal\u2019s preferred measure: PCE and Core PCE.<\/li>\n<\/ol>\n\n\n\n
In spite of the positive market outlook, the Bitcoin price has seen a decline from $66,800 to $62,200 within 24 hours from the meeting. So let\u2019s take a look at a few reasons why this decline happened.<\/p>\n\n\n\n
Technical Analysis of Bitcoin (August 2nd, 2024)<\/h2>\n\n\n\n
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There are a few possible reasons for this sell off. The first being the concept of<\/strong> buy the rumors, sell the news. <\/strong>With the FOMC meeting being extremely dovish, it was the perfect time to sell the news.<\/p>\n\n\n\n
Beyond that, we also have technical factors influencing the selloff. The Bitcoin price simply was not at a significant support level to see a powerful push higher. Furthermore, Bitcoin was declining from a selloff at $70,000, reached just a week before the FOMC meeting.<\/p>\n\n\n\n
Technical Reasons for the Selloff at $70,000: <\/strong>The price has reached the descending channel\u2019s highs and a Daily Fair Value Gap formed since June 2024. Investors from $56,000 were also incentivized to sell at a premium for a nice return.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
Bitcoin currently has now tapped a significant support zone from $63,000 to $64,000. <\/strong>Furthermore, it\u2019s come back to fill a Daily Fair Value Gap from $61,300 to $62,400. These areas may propel Bitcoin to retest the descending channel\u2019s highs, aligning with the Point of Control at $67,170, established since the massive rally from March.<\/p>\n\n\n\n
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