27.06.202311:32 Forex Analysis & Reviews: BTC/USD: positive and negative factors

The cryptocurrency market corrected downward on Monday following an impressive growth last week, when Bitcoin broke the $31,000 mark, reaching a new high since June 2022 at $31,443.

The BTC/USD pair found support near the $25,000 mark and in the key levels of $25,300 (200 EMA on the daily chart) and $25,700 (144 EMA on the daily chart).

The sharp strengthening of Bitcoin and major altcoins also occurred against the backdrop of positive news from the world of the crypto industry.

In particular, it became known that BlackRock Inc., one of the largest asset management companies in the United States, filed an application with the U.S. Securities and Exchange Commission (SEC) to create a spot investment exchange-traded fund (ETF) on BTC (iShares Bitcoin Trust).

In the event of success, major investors will have another reliable investment instrument in cryptocurrencies. If approved, the spot Bitcoin ETF will attract new investments in BTC.

It was also revealed that Wall Street giants Citadel, Fidelity, and Charles Schwab have launched their own decentralized cryptocurrency exchange, and on June 21, Valkyrie filed an S-1 registration form with the SEC. Already managing ETFs for Bitcoin futures, namely the Valkyrie Bitcoin Strategy (BTF) ETF and the Valkyrie Bitcoin Miners (WGMI) ETF, the company plans to list its fund on Nasdaq with the ticker symbol BRRR.

Furthermore, last week, digital currencies received unexpected support from Federal Reserve Chairman Jerome Powell, who stated that the Federal Reserve considers stablecoins as a means of payment and emphasized the need for the involvement of the U.S. central bank in regulating the stablecoin market, which he referred to as "a form of money" rather than securities.

Cryptocurrency market participants expect Bitcoin to become the locomotive of growing investor interest in cryptocurrencies and continue to rise, initially towards the 2022 local peak at $48,184 and then towards the 2021 peak at $69,138.

One of the negative factors for cryptocurrencies could be the Federal Reserve's monetary policy if its tightening cycle continues.

Last week, the probability of a Fed interest rate hike at the July meeting was already estimated by market participants at 77%, according to CME Group data. This means that the fiat dollar and the digital USDT may further strengthen against their counterparts in the currency and cryptocurrency markets, respectively.

In his speech on Wednesday and Thursday in Congress with a semi-annual report on monetary policy, Fed Chair Powell confirmed that it would be "appropriate to raise rates again this year and possibly two more times."

"Inflation pressures continue to run high, and the process of getting inflation back down to 2 percent has a long way to go," Powell said, noting that the Fed understands the "hardship that high inflation is causing" and "remain strongly committed to bringing inflation back down to the 2% goal."

The dollar significantly strengthened after Powell's remarks, gaining approximately +0.7% in the DXY index for the week, once again rising above the 102.00 mark. At the start of today's European trading session, it was near the 102.40 mark.

Some economists believe that the U.S. dollar will rise by 5% by the end of the year due to various potential risks, such as volatility in the banking sector, geopolitical risks, and persistent inflation.

This means that excessive investor optimism regarding Bitcoin and other cryptocurrencies will be partly offset by high demand for the dollar.

From a technical point of view, a breakout of the range formed between the levels of 30,800.00 and 29,820.00 could be the fastest signal for resuming positions in one direction or another. In the event of a downward trend, a breakout of the support level at 29,395.00 (200 EMA on the 1H chart) would serve as an additional signal in favor of short positions.

In an alternative scenario, after breaking through the resistance levels at 30,800.00 and 31,000.00 and reaching a new high of 31,443.00 last week, the BTC/USD pair will head towards the aforementioned local peak in 2022 at 48,184.00, and then towards the 2021 peak at 69,138.00.

Support levels: 30000.00, 29820.00, 29395.00, 29000.00, 28000.00, 27640.00, 27000.00, 26250.00, 26000.00, 25640.00, 24760.00

Resistance levels: 30800.00, 31000.00, 31443.00, 35000.00, 46000.00, 47000.00, 48000.00