Cryptocurrency market July 27: Bitcoin holds steady at $21,000 while waiting for news from the Fed

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2022-07-31 01:52:39

Bitcoin (BTC) briefly dipped below $21,000 and then rebounded slightly on July 26 as Wall Street prepares for a decision on US anti-inflation policy.

Cryptocurrency Market

Market data shows that Bitcoin price ended its sideways phase at the opening of Wall Street, hitting a low of $20,706 and then starting to recover, closing daily at $21,254.

Bitcoin price chart July 27, 2022

Compared to the local peak of $24,280 on July 20, the market is now down more than 14% as investors worry about the Federal Reserve’s rate decision on July 27. The Fed raises interest rates. The higher the fundamentals, the more detrimental it is to crypto investors.

BTC has lost a higher low that represents a technical uptrend in a lower time frame. Therefore, the uptrend that lasted from last week to now is considered to be over. The current pullback is a signal that Bitcoin has lost its 200-week moving average. Many opinions on social networks believe that the market will create a reversal pattern in the near future. FOMO entering the market at this time is considered quite dangerous.

However, many other analysts are quite optimistic about the long-term future of Bitcoin. PlanB, the father of the Bitcoin Stock-to-Flow price model, thinks BTC/USD could still trade as high as $1 million in 2027.

Meanwhile, altcoins are showing mixed signals. Some altcoins have started to recover slightly from yesterday’s drop. In which, Qtum (QTUM) and Monero (XMR) are the leading projects when recording profits of 11.5% and 10.3% respectively in 24 hours. Followed by Quant (QNT), Ethereum Classic (ETC), OKB (OKB) when rising above 5%. In contrast, many cryptocurrencies have yet to recover their previous losses. UNI and CVX are losing the most by 4%, followed by NEXO, APE, SNX, KLAY and DASH which are losing about 3% in the 24-hour timeframe.

In the top 10, after establishing a local bottom at $1,356, Ethereum (ETH) bounced back, reclaiming $1,400 and is currently trading around $1,438, up slightly by 1.26% on the day. However, on the weekly timeframe, the cryptocurrency is recording a loss of 6.4%.

Other strong tokens such as BNB, XRP, ADA, SOL, DOGE are all motionless compared to yesterday. However, considering the 7-day timeframe, the altcoins in the top 10 are all suffering huge losses. BNB (-5.34%), XRP (-10.53%), ADA (-11.37%), SOL (-20%).

Macro factors

The International Monetary Fund (IMF) has released its World Economic Outlook for July 2022, forecasting a slowing global growth rate to an average of 3.2% this year and 2.9% next year. year 2023.

“The risk of a recession is particularly prominent in 2023, when growth in some economies is expected to bottom out, cumulative household savings during the pandemic will be reduced and even small shocks will occur. could bring economies to a halt.”

According to the latest forecast, the United States will have only 0.6% real GDP growth in the fourth quarter of 2023 year-on-year, which will add to the challenges of fighting the recession.

U.S. stocks fell on Tuesday (July 26) after Walmart lowered its profit forecast, sending retail stocks lower and raising concerns that consumer spending may not be strong enough to help America out of recession. The Dow Jones Industrial Average fell 228 points, or 0.71%, to 31,761, the S&P 500 lost 1.15% to 3,921 and the Nasdaq Composite fell 1.87% to 11,562. However, all three major indexes are recording their best month since the beginning of 2022 so far.

Walmart lowered its quarterly and full-year profit forecasts due to high food inflation. This alarmed investors, prompting them to consider the impact on other retail stocks. Walmart said higher inflation prompted consumers to cut back on spending on goods, especially apparel. Accordingly, Walmart shares fell 7.6% on Tuesday and dragged a series of other retail stocks into the red.

Volatility in the retail sector has affected e-commerce stocks. Shopify shares lost 14.1% after the payments provider announced it was laying off about 10% of its global workforce. Shopify will announce business results today (July 27). Amazon shares lost 5.2%, while Block and PayPal fell 7.1% and 5.7%, respectively.

Inflation has also altered the cost of production for companies like General Motors, causing stock prices to lose 3.4% after posting earnings that fell short of expectations.

On the other hand, Coca-Cola shares rose 1.6% after posting revenue and profit that beat expectations. McDonald’s shares also added 2.7% as business results showed growth in international markets. Industrial stocks also rallied strongly in the session, with 3M stock up 4.9% after posting better-than-expected revenue and profit.

Investors are also gearing up for more business results from large-cap technology companies and economic data this week, as well as meeting results from the US Federal Reserve (Fed). . These will be important events that will help Wall Street shape expectations for the rest of the year.

With inflation soaring in the US, economists from monetary policy forecasting and analysis firm LH Meyer think the Fed may stop shrinking its balance sheet sooner than expected. Many analysts suspect the Fed will raise the federal funds rate by at least 75 and possibly as much as 100 basis points (bps) at this meeting. In addition to rate hikes, last year the Fed said it would reduce its balance sheet by nearly $9 trillion by June 1 by phasing out its purchases of mortgage-backed securities (MBSs). ) and maturing bonds.

However, critics say, the US central bank hasn’t really been shrinking its balance sheet and the Fed has been accused of repeatedly maintaining its quantitative easing (QE) practices as it continues to buy long-term securities from the market.

Gold prices fluctuated in a narrow range on July 26 while investors turned their attention to the Fed’s two-day meeting. At the end of the session, the spot gold contract was almost flat at 1,717 USD/oz. Gold futures contract was also almost unchanged, maintaining around $1,716/oz.

Meanwhile, oil prices reversed course and closed the session in the red on Tuesday, as investors worried about falling consumer confidence and the release of 20 million barrels of crude from the Strategic Petroleum Reserve. of the United States (SPR). Ending the session, the Brent oil contract fell 75 cents, or 0.7%, to $104 a barrel. WTI oil contract lost 1.72 USD to 94 USD/barrel.

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