Bitcoin, Ethereum on Edge: Will Fed week lead to deeper decline?

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Bitcoin has been trading in a range for a month, testing the lower band Meanwhile, Ethereum recently bounced off critical support Fed press conference key for both cryptos

Bitcoin has been in a month-long consolidation phase characterized by low-volume trades in the lower band over the past week.

Recent price action shows that BTC is finding steady support around the $29,700 level while experiencing selling pressure around the $30,100 region, causing the price range to narrow.

With macro data at the center of attention this week, market participants are keeping a close eye on the Fed’s upcoming interest rate decision, which could serve as a catalyst for a crypto breakout or crash.

Instead of the Fed’s interest decision scheduled for the middle of the week, the real game-changer may be the statements made at the press conference that followed.

Market expectations are leaning towards a 25 basis point rise, and that is already priced in until mid-week. However, it is the wording used in the post-rate decision statement that will hold the key, especially for institutional investors in the crypto industry. If hawkish sentiments persist, Bitcoin’s horizontal movement could face downward pressure.

If things go like this, the next support line in the lower region could take shape in the $28,500-$29,000 range. This area is supported by the rising trendline of 2023 and the 3-month EMA. Additionally, the Stochastic RSI on the daily chart is showing oversold conditions in July, which could help limit any potential pullbacks.

In this scenario, Bitcoin testing $28,500 in the lower zone could lead to a move towards the $30,500-$31,500 range if buyers increase their volumes. A quick reach in this region could even trigger a trend towards $34,000 given the possibility of further buying.

However, if the price action breaks below the uptrend, Bitcoin could experience bearish momentum and pull back to the May $26,300 support zone. To sum up, keep a close eye on Bitcoin’s move into the $28,500-$29,000 range in the event of a channel breakout, as this will provide crucial information on the direction of the trend.

h2 Ethereum: Technical view/h2

While Ethereum showed a strong correlation with Bitcoin, it experienced a setback in June, losing its 2023 uptrend. Despite losing momentum during the uptrend, the cryptocurrency managed to stage a gradual recovery until the first half of July.

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However, things took a downward turn again in the second half of July as selling pressure appeared around the $2,000 mark.

At the start of the week, the cryptocurrency markets witnessed selling pressure, sending Ethereum falling below the critical support level of $1,850. Currently, it is of utmost importance for ETH to remain firm between $1,825 and $1,850.

Any drop below this range could potentially extend the bearish momentum, with a possible drop to $1,750 by the end of the day and, thereafter, a retest of the downtrend line that originated in April. In such a scenario, it is possible that Ethereum would experience an average drop to around $1,660, triggered by a general selling wave.

On the other hand, holding the support line could boost buyer confidence leading to a potential rebound. In this case, Ethereum could climb into the $2,000-$2,100 range, especially after the Fed’s decision mid-week.

In summary, the current week has started with cryptocurrencies testing crucial support levels, and the market’s next move will likely depend on how bulls defend these critical areas.

Disclaimer: This article is written for informational purposes only; it does not constitute a solicitation, offer, advice, advice or recommendation to invest as such, nor is it intended to induce the purchase of assets in any way. I would like to remind you that any type of asset is valued from many angles and is very risky and therefore any investment decision and the associated risk lies with the investor.

Written by: Investing.com

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