Bitcoin price has been on a downward channel for two months now amid a risk-off sentiment. On the one hand, SEC lawsuits against Coinbase and Binance have further added to the observed fear in the market. Even so, bitcoin price may report some recovery from the US inflation data on Tuesday and Fed interest rate decision on Wednesday.
What’s driving the crypto market?
As is often the case, the market sentiment is one of the key drivers of bitcoin price and the broader crypto class of assets.One of the tools used to measure this is the crypto fear & greed index. Notably, it has dropped to a fear level of 45 after being on a neutral level of 47 in the previous session.
Evidently, investors are hesitant to place huge bets after SEC’s lawsuits against two of the largest crypto exchange companies; Coinbase and Binance. While it may take some time before the lawsuits are done with, other catalysts in the form of US inflation data and the Fed interest rate deision will likely impact bitoin price movements.
Signs that inflation has further eased is set to be bullish for cryptocurrencies. Besides, investors expect the Fed to pause on its interest rate hikes, something that may further boost bitcoin price recovery.
Bitcoin price prediction
BTC/USD has been hovering around 26,000 since the beginning of the week after dropping below the support zone of 25,500 in the past week. Even so, the crypto remains on the downtrend that has persisted for two months now.
A look at its daily chart shows bitcoin price still below the 25 and 50-day EMAs. As at the time of writing, it was 26,213.68; up by 1.19%.
In the short term, I expect bitcoin price to remain within the two-month long downward channel. As such, the range between 25,510.85 and 27,256.66 will be worth watching.
