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Investing.com – After multiple failures to break above the key $25,000 threshold, the last attempt on Tuesday morning has seen it weaken further and further, testing psychological support at $24,000 on Wednesday morning.
The thus posted a fall of 4% over 24 hours, and reduced its gains to 8.55% over 7 days.
After financial markets in general held up well against rising Fed rate hike expectations in recent days, risk aversion took over yesterday, as evidenced by the fall in US indices, which plunged 2% and 2.5%, a context that also penalized cryptocurrencies.
Separately, quarterly results from Coinbase (NASDAQ:) released last night showed trading volume down 12% in Q4 2022 compared to Q3, suggesting retail investors are turning away from the cryptocurrency market.
But above all, crypto investors are exercising caution ahead of the release of the Fed Minutes this Wednesday evening.
With the market now pricing in a significant (21%) chance that the Fed will raise rates by 50 basis points next month, after signaling a limited 25 basis point hike at the meeting earlier this month , tonight’s Fed minutes could have a decisive impact.
Thus, investors will study the smallest details, in order to obtain clues to refine their expectations.
If this publication increases the market’s likelihood that the Fed will raise rates by 50 points instead of 25 points next month, Bitcoin and the cryptocurrency market in general could plunge.
If, on the other hand, the minutes confirm the prospect of a rate hike limited to 25 points next month, a relief rally will be possible on the BTC/USD.
Technical thresholds to watch on Bitcoin
From a graphical point of view, the zone of 24,000/23,500 $ is an important support, the breakout of which would constitute a bearish signal, which would put in sight 23,000 $, then 22,000 $ and 21,500 $.
On the upside, the $25,000/$25,250 area remains a major resistance. However, in the event of a breach, few obstacles will stand in the way of Bitcoin before $28,000 and then $30,000.