Despite an initial rebound toward $70,000, the Bitcoin price has settled below $67,000. The sell-off occurred slowly, following yesterday's weakness on Wall Street, and despite the dollar is limiting the scale of the gains today, BTC's momentum appears to be waning again. Investor activity during the Asian session, whereby far the bulk of the increases have taken place in recent months, was subdued. This shows that cryptocurrencies and Bitcoin may still be quite dependent on inflation dynamics and Federal Reserve communications. We can expect higher volatility on crypto market, after US NFP release at 1:30 PM GMT.
Fed members sent some 'worrying' messages for risky assets yesterday. Neal Kashkari and Austan Goolsbee questioned the need for rate cuts this year if inflation does not come down decisively from current levels. Other members were less hawkish, but also stressed the need to watch trends more closely. This could lead to the conclusion that the Fed will not decide on rate cuts in June, especially since a decision at the OPEC+ summer meeting is still uncertain. Higher oil prices, which are now at 6-month highs, add to the uncertainty for Wall Street investors.
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Looking at Bitcoin, on the H1 interval we still see significant selling activity in the $69,000 - $70,000 area. A support zone worth watching is the 23.6 Fibo retracement of the January 2023 upward wave at $65,000. A breakout below this zone could suggest a retest of $60,000. On the other hand, a breakout above $71,000 could signal a return of pre-Hallving demand. There are about 11 days left until a significant event, further constraining supply. The key will be what ETFs do by then, and whether Wall Street sentiment manages to improve quickly, after yesterday's declines driven by the dollar, oil and geopolitical tensions.
Source: xStation5
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