The cryptocurrency market traded in the red on Wednesday after the release of the minutes from June’s Federal Open Market Committee (FOMC) meeting showed that almost all Fed officials “judged that additional increases in the target federal funds rate during 2023 would be appropriate,” with some even favoring a rate hike in June.
The hawkish tone of the FOMC meeting also put pressure on stocks, which traded in the red throughout the day as traders opted to remain on the sidelines ahead of the June jobs report scheduled for release on Friday. The S&P, Dow and Nasdaq were all lower at the closing bell, down 0.20%, 0.38%, and 0.18%, respectively.
Data provided by TradingView shows that Bitcoin’s (BTC) price broke below support at $30,900 in the early hours and fell to a low of $30,290 before bulls managed to bid it back above $30,500 in the afternoon.
BTC/USD Chart by TradingView
The decline in Bitcoin price, which began during the July 4 holiday in the U.S., resulted in July Bitcoin futures prices trading weaker in early trading on Wednesday, according to Kitco senior technical analyst Jim Wyckoff.
Bitcoin futures 1-day chart. Source: Kitco
“The current pause and choppy trading at higher price levels is not bearish and suggests the bulls are storing up energy for another push higher in the near term,” Wyckoff said. “The bulls have the firm overall near-term technical advantage.”
Insight into the major resistance levels for BTC moving forward was provided by MN Trading analyst Luuk Koolen, who posted the following monthly chart for Bitcoin identifying two resistance levels that he expects to give BTC a significant amount of pushback.
BTC/USD 1-month chart. Source: MN Trading
“The first resistance level is the lower part of the monthly order block, which is around $34.4k,” Koolen said. “Slightly higher, around $37k, is the end of the monthly [fair value gap] (FVG), which also acts as a form of resistance. However, if the price is so bullish that it can break through both resistance zones, I expect the price to seek liquidity around $48k.”
Zooming in on the weekly timeframe, Koolen said, “It would be logical to continue the uptrend and at least test $35k.”
BTC/USD 1-week chart. Source: MN Trading
“Slightly higher, around $37.5k, there is a strong resistance zone formed by the weekly fvg + order block,” he said. “Additionally, it aligns with the upper part of the monthly fvg, suggesting that BTC may struggle to break through this area. The monthly liquidity is also visible on the weekly timeframe, making it a good target for swing long positions.”
Turning to the daily chart for BTC, Koolen highlighted “the sweep of liquidity at the upper end,” which he said “increases the likelihood of a correction.”
BTC/USD 1-day chart. Source: MN Trading
“It would make sense for BTC to test support levels below $30k from here, bounce back, and move towards the liquidity at $32.4k,” he said. “Considering the overall picture on higher timeframes, I personally believe that dips below $30k provide excellent opportunities to accumulate long positions.”
Altcoins pull back as traders take profits
Altcoins experienced a sell-off on Wednesday as traders took the hawkish tone from the Fed as a sign to take profits on their recent gains, resulting in all but a dozen tokens in the top 200 trading in the red for the day.
Daily cryptocurrency market performance. Source: Coin360
Notable gainers included Verge (XVG), Solar (XSP), and Threshold (T), which increased by 37.37%, 14.73%, and 4.5%, respectively, while Storj (STORJ) price fell 14.77% and BitDAO (BIT) declined by 11.29%.
The overall cryptocurrency market cap now stands at $1.19 trillion, and Bitcoin’s dominance rate is 49.8%.