BTC/USD Struggles With Support Ahead Of FOMC Minutes

Bitcoin price, despite latest improvement above $20k, has remained vulnerable to economic data particularly ahead of the awaited FOMC Minutes.

BTC/USD currently consolidates between key technical support and resistance. Cryptocurrencies tend to benefit from the US holiday but most crypto assets are expected to encounter a relatively tough week ahead.

After a second quarter that had been mostly out of control, Bitcoin entered the third quarter with dull motion as prices continue to consolidate hovering around the $20,000 mark.

Since the beginning of 2022, accelerating geopolitical risks and sentiment shifts (basically due to interest rate hikes, war and a gloomy global economic outlook with recovery obstacles) have impacted crypto assets, driving Bitcoin back towards levels last seen in December 2020.

The BTC/USD pair has frequently experienced large price swings, gaining traction once a clear direction has materialized. By using Fibonacci levels from historical moves, both technical and psychological levels have provided support and resistance over the passage of time, assisting in fueling momentum once these levels are breached.

Upon falling below $18,000 on June 18, bears were able to drive prices to $17,592 in an endeavour to retest the December 2020 low at $17,569. Failure to break below this level allowed buyers to drive prices higher before running into a wall of resistance at $21,000. At the same time, both bulls and bears continue to trade side-ways, the weekly Relative Strength Index has fallen below 30, threatening oversold territory.

With a negative correlation existing between BTC/USD and interest rates, mounting price pressures and an influx of stimulus, throughout the pandemic, has forced the Fed to decide rate hikes more aggressively than expected, reducing the appeal of speculative assets.

As the projected economic growth outlook remains rather unpromising, Bitcoin prices have celebrated the US holiday in the green territory, as price moves cautiously just above $19,000. With the FOMC Minutes and NFP data on this week’s economic calendar, prices could be driven out of the $18,000 – $22,000 range.