Bitcoin (BTC) Bitcoin prices fell as the largest cryptocurrency fell for a third straight day, falling below its 200-day simple moving average (SMA), a good indicator of long-term price trends in both traditional and crypto markets.
The cryptocurrency fell below the $58,492 average during European trading hours on Thursday to below $57,300, a price last seen on May 2, according to data on the TradingView charting platform.
Markets that consistently trade below the 200-day moving average are said to be in a bearish trend, while those that trade above the average are considered bullish. Bitcoin broke above the 200-day simple moving average in October, when the average value was $28,000. The breakout — fueled by expectations of a U.S.-based Bitcoin spot exchange-traded fund — paved the way for a record high above $70,000 by March.
One factor influencing Bitcoin price movements is interest rates in the United States. As interest rates fall, riskier investments like cryptocurrencies become more attractive. Federal Reserve meeting minutes released on Wednesday showed that policymakers led by Chairman Jerome Powell are unwilling to cut rates until more data gives them greater confidence that inflation is moving sustainably toward their 2% target. That could come as early as tomorrow, when the Labor Department releases June’s nonfarm payrolls figure.
“We believe that hawkish comments from Jerome Powell and continued selling pressure are likely to push Bitcoin lower to 52,000,” Valentin Fournier, a digital asset analyst at consulting firm BRN, said in an email. “However, we recommend viewing this as a buying opportunity, as improved cryptocurrency regulations and easing inflation in the US have not yet fully priced in and are likely to provide strong momentum once investors shift focus to a longer-term view.”
The sell-off could run out of steam if payrolls data shows the labor market weakened in June. The figure is expected to show payrolls increased by 195,000 jobs, a marked slowdown from the 272,000 jobs added in the previous month, according to FXStreet. The unemployment rate is expected to remain steady at 4.0%, while average hourly earnings are forecast to slow to 3.9% from 4.1% year-over-year.
The bullish market progress can be identified by the rising trend line connecting the October and January lows. Bitcoin’s recent decline below the 200-day line has brought the bullish trend line support at $57,590 into focus.
A close (midnight UTC) below this level could lead to further selling and bearish price momentum, as traders often use trendline details as indicators to make trading decisions.
Fournier isn’t the only one who is looking for further declines. According to Alex Kuptskevich, chief market analyst at FxPro, prices could drop to as low as $51,500 in the near term.
“From the current situation, a 12% decline to $51.5K (February consolidation area) is more likely than the same amount of growth to $65.8K (50-day moving average),” Koptskevich said in an email.
Update (July 4, 9:45 UTC): Adds the interest rate, the jobs report starting in the fourth paragraph, the analyst quote in the fourth paragraph, and the potential decline in the last two paragraphs.