Bitcoin Price Under Pressure as Retail Traders Shift to Altcoins Amid Anticipated FOMC Meeting

Cryptonews John Brightwater September 3, 2024

Bitcoin Price Under Pressure as Retail Traders Shift to Altcoins Amid Anticipated FOMC Meeting

On September 3, Bitcoin’s price remains persistently below the crucial $60,000 threshold, struggling to overcome significant resistance. Recent on-chain analytics highlight a trend where retail investors are reallocating their assets towards altcoins, which has exerted additional downward pressure on Bitcoin’s market performance this week.

Following a notable decline on August 25, the cryptocurrency market experienced a pronounced dip, with Bitcoin’s value plummeting over 10% from its recent peak of $64,998 during a tumultuous 48-hour timeframe. Since that decline, Bitcoin has continuously struggled to regain the $60,000 level.

Market observers are currently paying close attention to the forthcoming Federal Open Market Committee (FOMC) meeting scheduled for September 17, where it is anticipated that the United States Federal Reserve will announce its first interest rate cuts in the past four years. The expectation of these monetary policy adjustments appears to be catalyzing retail crypto traders to divest their Bitcoin holdings in favor of the more dynamic altcoin market, thereby further contributing to Bitcoin’s declining price.

Recent charts indicate a rejection of Bitcoin, priced at $66,000 on August 5, after a rally of 15.8% over the preceding ten trading days. This inability to surpass the $66,000 mark led to a sizable sell-off among short-term traders. As of September 3, Bitcoin trades approximately around $59,000, reflecting a 9.40% decline over the last nine days, while assets such as Litecoin (LTC) and Monero (XMR) have surged into double-digit gains during the same timeframe.

With the anticipated FOMC meeting approaching, potential rate cuts may induce additional selling pressure on Bitcoin in the short term. As the market approaches what appears to be the onset of a bullish phase, there is a possibility that traders may choose to liquidate Bitcoin in order to seize larger gains within the altcoin ecosystem. Consequently, should bullish traders adopt a passive observation stance, Bitcoin’s price may find it challenging to maintain a robust support base above the $60,000 mark.

The prevailing bearish sentiment surrounding Bitcoin is corroborated by current on-chain analytics, which reveal an increase in Bitcoin sell orders on cryptocurrency exchanges this week, reinforcing the narrative of a downtrend. Analytical tools such as the Aggregate Exchange Order Books are instrumental in capturing the demand and supply dynamics in real-time, elucidating market depth through the comparison of total buy and sell orders across various exchanges.

Current data reveals a notable oversupply of Bitcoin in the market, contrasted with existing demand. Presently, the total active buy orders number approximately 49.82k BTC, valued at about $2.9 billion, while active sell orders stand at 53.7k BTC, translating to around $3.2 billion. This excess supply of $300 million indicates a bearish outlook for Bitcoin’s short-term price trajectory. The significant presence of a $2.2 billion sell wall may hinder any potential upward momentum for Bitcoin, particularly as market stakeholders await the FOMC meeting on September 17. Such a cautious market sentiment may further impede Bitcoin’s ability to break through crucial resistance levels.

Technical indicators suggest that Bitcoin’s price forecast remains bearish in the near term. The Bollinger Bands indicate rising volatility, with prices trading below the middle band and resistance being prominent around $62,800. Achieving this price point is essential for bullish traders hoping to reverse the downward trend. Conversely, should Bitcoin fail to surpass $62,800, the next support level will be at $55,874, as indicated by the lower Bollinger Band. A breach of this support could potentially lead Bitcoin to lower valuations, possibly approaching $53,000.

Moreover, the Accumulation/Distribution Line reinforces the bearish sentiment, demonstrating a downward trend that suggests that selling pressure is consistently exceeding buying interest, thereby increasing the likelihood of further declines in Bitcoin’s price.

In conclusion, Bitcoin presently contends with substantial resistance at $62,800. Should it be unable to navigate above this threshold, further downward pressure will likely ensue, with the support at $55,874 being tested in the upcoming days. Given the upcoming FOMC meeting, traders may exercise caution, potentially exacerbating the existing bearish trend.