A failure to hold above $23,000 would pave the way towards the $22,600 immediate support zone
Bitcoin gave up 2.18% on Wednesday, marking the fourth consecutive day of declines for the largest cryptocurrency by market capitalization. Traditional markets were lower as well, with the S&P 500 index finishing 0.72% lower.
The selling pressure intensified both in financial markets and crypto space as the FOMC meeting minutes revealed a more hawkish stance than expected. The central bank said it plans to continue raising interest rates into restrictive territory to cool inflation. Members of the FOMC also said they plan to double the pace of balance sheet shrinkage in September.
Risk sentiment deteriorated following the release, pressuring cryptocurrencies along with high-yielding assets. As a result, BTCUSD slipped from the $24,000 mark to find support around $23,200. Earlier in the week, the coin peaked above $25,000 but failed to preserve the upside momentum and attracted some profit-taking instead, suggesting the digital currency is not ready to stage a straightforward and sustained rally.
Still, the overall tone in the cryptocurrency market has improved over the last weeks, with bitcoin holding above the $20,000 threshold since mid-July. On Thursday, the BTCUSD pair has settled just above the flat-line, struggling for direction after the recent sell-off.
The latest rejection from two-month highs around $25,200 suggests traders still doubt bitcoin’s strength. The coin is likely to stay on the defensive in the short term and could see deeper losses before the buying pressure reemerges to take the prices back above the recent highs. On the downside, a failure to hold above $23,000 would pave the way towards the $22,600 immediate support zone, followed by this month’s lows in the $22,400 region.