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Bitcoin investors face potential trading range decline as BTC price approaches two-month lows.
On August 17, Bitcoin (BTC) aimed for two-month lows as inflation in the United States once again unsettled cryptocurrency markets.
BTC/USD 1-hour chart. Source: TradingView
BTC price hints at departure from prolonged range
Data from Cointelegraph Markets Pro and TradingView indicated that BTC reached its lowest price levels since June 21, with BTC/USD dipping to $28,300.
This decline followed the release of the minutes from the United States Federal Reserve’s July meeting, which addressed future monetary policy.
Members of the Federal Open Market Committee (FOMC) expressed worries that inflation could stay high without additional interest rate increases — a scenario that risk assets were keen to avoid.
“Participants discussed several risk-management considerations that could influence future policy decisions,” the minutes stated.
“With inflation still significantly above the Committee’s long-term goal and the labor market remaining tight, most participants continued to see considerable upside risks to inflation, which could necessitate further tightening of monetary policy.”
Although the Fed also acknowledged “uncertainty” regarding the impacts of current monetary tightening, Bitcoin and altcoin traders responded negatively to its wording, causing BTC/USD to breach several recent support levels.
These included the 21-week and 100-day simple moving averages (SMAs) at $28,600 and $28,570, respectively.
BTC/USD 1-day chart with 21-week, 100-day SMA. Source: TradingView
Bitcoin also tested the lower limit of the multi-month trading range, previously noted by well-known traders Daan Crypto Trades and Crypto Tony.
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BTC/USD annotated chart. Source: Daan Crypto Trades/X
“$28,800 has now been lost on Bitcoin so I will be looking to short this down now while we remain below $28,800,” the latter informed X subscribers on that day, adding that $28,000 was his initial target.
BTC/USD annotated chart. Source: Crypto Tony/X
Markets maintain bets on rate hike pause
Conversely, not everyone seemed convinced that the upcoming FOMC meeting in September would result in increased rates.
Related: Bitcoin speculators now own the least BTC since $69K all-time highs
According to CME Group’s FedWatch Tool, the likelihood of the Fed maintaining the current rate remained close to 90% following the release of the minutes.
Fed target rate probabilities chart. Source: CME Group
Analysts were also not in complete agreement. In a forecast last week, Caleb Franzen, senior analyst at Cubic Analytics, stated that it was disinflation, rather than inflation, that was showing “sticky” characteristics.
“Disinflation + stronger earnings + stronger economic data + nearing the end of the rate hike cycle has been an ideal combination for market returns and the emergence of an uptrend,” he asserted.
“While these conditions could change in the future, I don’t see any evidence that it’s changed yet.”
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This article does not provide investment advice or recommendations. Every investment and trading decision carries risk, and readers should perform their own research before making a choice.
