Top 5 Reasons Why Bitcoin Price Sell Pressure Is Mounting Ahead of FOMC
Bitcoin’s price faces significant downturn pressures due to geopolitical tensions and FOMC anxieties. Data indicates long-term holders are withdrawing, leading new investors to contribute to selling. Recent price fluctuations show volatility, underscoring a potential late-stage bull market phase.
Bitcoin’s price is facing significant downward pressure as a combination of geopolitical and economic uncertainties emerge. The ongoing conflict between Israel and Iran, coupled with looming Federal Open Market Committee (FOMC) announcements, is fostering a volatile trading environment. Recent data from Glassnode indicates that long-time Bitcoin holders are retreating from the market, while newer investors are contributing to sell pressure, leading to a decline in prices.
The recent spike in volatility has coincided with Bitcoin’s fluctuating price, which was last seen at around $105,480, falling below the critical support of $106,000 multiple times over the past days. As traders grapple with the fallout from the Israel-Iran conflict, the Crypto Fear & Greed Index has seen a rise from 61 to 68, signaling growing anxiety as the FOMC meeting approaches.
The geopolitical situation in the Middle East, particularly the tensions between Israel and Iran, is exerting significant influence on Bitcoin’s market performance. Reports indicate that the Israeli military has intensified strikes against Iranian military assets, while Iran retaliates, further escalating tensions. Meanwhile, U.S. President Donald Trump has dismissed claims of pursuing peace talks with Iran, labelling them as “highly fabricated, fake news.”
Interest in the FOMC meeting set for Wednesday adds another layer of uncertainty. Market observers anticipate no changes to interest rates, but Fed Chair Jerome Powell’s remarks on monetary policy are expected to provide crucial insight into future economic directions. Currently, traders project a chance of two rate cuts in September and October, increasing the market’s focus on Powell’s speech. Nick Timiraos of The Wall Street Journal emphasized the importance of this meeting and its potential implications for the market.
On-chain metrics released by Glassnode highlight a shift in market dynamics. Last week, Bitcoin wallets that had held BTC for over a year were dominant profit takers; however, more recent activity shows that those holding Bitcoin for 6 to 12 months are now liquidating their assets. This shift resulted in notable profits, with $904 million realized by 6-12 month holders, creating additional sell pressure in the market. Meanwhile, the profit for long-term holders was significantly lower, at $324 million.
Bitcoin has entered what seasoned analysts, including Willy Woo, describe as the late phase of the bull market. Despite the prevailing sell-off, he speculates that the market still harbors potential for further upside, though signals suggest a potential bear market when the broader global economic landscape shifts. Analysts are paying close attention to support levels, with some indicating that a breakdown below $106,000 could foreshadow more substantial corrections.
Finally, Bitcoin’s recent trading activity shows heightened volatility. The cryptocurrency was noted to have highs of $108,915 but trading back down to $105,480, representing a nearly 2% drop in just a day. Trading volume surged by 25% within that same period, suggesting increased market activity amid the surrounding uncertainty.
In summary, Bitcoin’s price is experiencing mounting sell pressure influenced by various factors: the geopolitical crisis in the Middle East, the upcoming FOMC meeting, a notable shift in on-chain data signals, and the recognition of Bitcoin’s late bull market phase. This combination of elements is shifting trader sentiment from optimistic to bearish. Market observers will keenly monitor these developments as they shape Bitcoin’s immediate future.
Original Source: www.thecoinrepublic.com
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