Bitcoin continues to trade near $64,316 and in the past 24 hours, it is down by 1 percent. This lies in the range of $64k-$65k and this was already in the focus before the fed decision. It’s been two days and the price has shown decent volatility.
The Fed statement was hawkish for the traders
Warsh held his first press conference as chairman brief, maintaining a clear stance of offering guidance on what may happen to rates next. His core message to the markets was to just read the new data rather than speculate on the Fed’s next step. The FOMC kept up its statement to return inflation to 2 percent after years of being short.
The fed also mentioned the involvement of five task forces that are covering communication, balance sheets, data, jobs, and, at the end, the inflation framework. This statement didn’t sound aggressive but on the other side, traders reacted differently to it. The S&P went through one of its worst day moves for a year since 1994. This meeting was more focused on reducing the expectations of the market but it ended up triggering a significant shift in the forecasts for the rate.
Hamza Dweik, Head of Trading (MENA), Saxo Bank, mentioned to The Coin Headlines that
“U.S. equities reacted negatively to that shift in tone. Stocks sold off into and after the press conference, with the S&P 500 falling around 0.9 percent while the Nasdaq declined roughly 1.0 percent to 1.4 percent and the Dow dropped more than 500 points on the day. The move reflected a repricing in expectations, as investors pushed back the timing of rate cuts and began to factor in the possibility that policy could remain restrictive for longer or even tighten further.
The reaction highlights a broader shift in market dynamics. The focus is moving away from central bank support and toward fundamentals, with tighter financial conditions becoming a more persistent feature of the backdrop. That puts more pressure on valuations, particularly in rate-sensitive parts of the market.”
The $66.3k rejection level
Before the Fed got a word in, the chart itself had already signaled an alarm for the market participants. The rally from the May low found a ceiling just about at $66,363 which is the 61.8 percent retracement of the rally following $78,100 to $59,109 and the correction went lower. That level was held throughout the Fed’s entire proceeding without wicking to the upside.
The market pattern has since looked somewhat mechanical, followed by a push towards the mid-$66k, failure against $67k multiple times, and a retracement back into this same $64000-$65000 range. The market participants have been experiencing rangebound movement of this largest cryptocurrency for several days now. The asset has failed to recapture the daily pivot at $64881 on a daily closing basis. RSI14 is 38.58, and RSI21 is 38.44 which is still below the midline despite the shorter-term RSI7 just standing at 44.04.
The histogram from the MACD was soft and showed up with a reading of +604.73, but the line continues to be negative at –2449.46 indicating it is falling short of the signal of -3054.19. All of the critical moving averages, which are the 30/200 day SMA/EMA in this case, are resting over the price and remain pointing downward.
Considering the volume during the past day was $31.21 billion, which is expected at this level of resistance. Further out, the 127.2/161.8 percent fibonacci extensions at $83,266 and $89,837. These levels are still too far to be achieved in the short term until something major catalysts take place.
Long-term holders are still holding strong
Long-term holders have barely reacted to the market shocks. Bitcoin that has been held for a longer period than two years is mostly staying put and there are only 218,421 BTC moving up to June 6. Their proportion of total supply is standing at 79 percent, and this is depicting that they are not selling into the Fed’s news. The group with the most compelling reason to worry about higher rates is also the category that has showed the least concern.
