- Bitcoin fell below $26,000 for two weeks before rebounding over the weekend.
- Ethereum dropped to $1,870 after many days over $1,900.
- On Tuesday morning, the AI hype helped Nvidia momentarily reach the $1 trillion corporate milestone.
- Jerome Powell, the head of the Federal Reserve, just made a hint that the Fed could be considering pausing rate hikes.
- Investors prepared for Wednesday’s House vote on the debt ceiling agreement.
The Bitcoin and crypto markets overall bounced back from their respective intra-week lows to end the previous week on an upward. The hope that the White House and congressional Republicans would strike a debt limit agreement was a major factor in the rebound.
On Tuesday morning, Nvidia briefly surpassed the $1 trillion mark in market capitalization thanks to a race by large and small tech firms to include generative artificial intelligence (AI) techniques into their offerings. The U.S. stock market is still doing fairly well after rebounding from the 2022 lows, despite the recent economic upheaval. The S&P 500 is now trading at 4,150, the Nasdaq is at 12,700, and the Dow Jones is currently trading around 32,750. Additionally, Jerome Powell, the head of the Federal Reserve, just made a hint that the Fed could be considering pausing rate hikes.
Powell said that the Fed could decide to take a pause from raising interest rates due to tighter credit conditions in the banking industry. That indicates the impacts of the Fed’s rate rise measures, which began last year, have now appeared. Banking regulations are becoming tougher and tighter after the closing of organizations including Silicon Valley Bank, First Republic, and others.
Ethereum strengthens its deflationary statistics:
Ethereum’s (ETH) deflationary position is firmly established. According to data, the blockchain burned more than 143,000 Ether assets in May, totaling almost $275 million. Over the last year, Ethereum’s supply grew negatively by 1.46%. That indicates the deflationary phase of the second-largest cryptocurrency has advanced. Additionally, according to the tracker, the network will burn around 2,441,00 tokens in 2023, totaling almost $4.5 billion.
Due to Ether’s deflationary characteristics, the correlation between Ethereum and Bitcoin is still becoming worse. In 2023, the strongest correlation between the top cryptos has begun to wane. This points to a probable long-term market shift in which Bitcoin and Ethereum operate more independently due to distinct supply and demand dynamics.
Bitcoin Price Analysis:
Bulls made an important move when the bears were unable to push the price below the immediate support level of $25,750. They forced Bitcoin back into the $27,812 region of resistance, but higher levels >$28,000 are luring sellers. At the resistance line at $27,812, the bears are seeking to halt the upswing. The chances of a break over the resistance line will increase if the bulls prevent the price from falling below the $27,000 price level. The BTC/USDT pair may increase to $29,500 if that occurs.
Despite the fact that the short-term outlook is favorable, traders should not let their guard down. The price often increases on rumors and decreases on news. The bears may be selling during rallies if the $26,500 barrier loses way. The pair may then crash to the crucial support range between $25,750 and $25,719 at that point.
Concluding Thoughts:
The price of bitcoin and the whole crypto market rose from their corresponding intra-week lows to end the previous week on an upward. Expectations of a debt limit agreement between the White House and congressional Republicans were a major factor in the rebound. Although the immediate outlook is favourable, traders should not let their guard down. The price often increases on rumours and decreases on news. After the agreement clears Congress, it will be interesting to watch whether the bulls maintain last week’s gains or give some of them back. The fact that Bitcoin’s supply is steadily declining because steadfast long-term investors aren’t willing to sell their holdings is one thing in the crypto bulls’ favour. The “Hodled and Lost Coins” measure for Glassnode has reached its highest point since May 2018.
Trading should not ease up despite the short-term outlook becoming positive. Frequently, rumors cause prices to climb, while news causes them to decrease. After the agreement passes muster with Congress, it will be interesting to watch whether the bulls maintain the momentum from last week or give up some of the gains. QT and the Fed’s aggressive rate increases have compelled consumers to pay higher interest rates on mortgages, auto loans, credit card payments, and other loans with variable rates. This is restricting the cash flow of consumers. Increased costs for products and services accompanied by a shrinking money supply typically results in a period of deflation, followed by a recession or a hard landing.
