Bitcoin (BTC) Price Sinks Below $58k: Here’s What to Expect

Bitcoin Price Analysis

Bitcoin price tumbled as low as $58,898 on Aug 4, marking a 16.17% decline within the 7-day timeframe, on-chain data trends suggests BTC could face more volatility in the week ahead.

Bitcoin Price Down 16% in 7-Days

Following Donald Trump‘s appearance that Bitcoin Nashville conference on Jul 27, Bitcoin price made a positive start to the week. On Monday May 29, Bitcoin price crossed the $70,000 mark for the first time in over 40-day dating back to June 7 2024.

However, partly due to streak of bearish catalysts from the US government, the Bitcoin price rejected at $70,000 and entered a steep downtrend as the week unfolded.

Looking at the chart above, we see how BTC price has posted a series of lower lows in each of the last 3-days. At the time of writing on Aug 4, Bitcoin is exchanging hands at $58,326 per coin, reflecting a 17.16% fall from the weekly time frame peak of $70,050 recorded on Monday.

Slower-Than-Expect NFP Data Could Rescue BTC

Bitcoin’s price downtrend accelerated on Wednesday, July 31 as the US Federal Reserve opted against a rate cut as many investors had anticipated.

But looking ahead, the dovish decline in US Non-Farm Jobs data posted on Friday, Aug 1, could trigger a positive swing in market momentum when the market resume trading on Aug 5.

On Aug 4 2024, the US Bureau of Labor Statistics published data on US unemployment claims for the July 2024.

According to the report, US Non-farm Payrolls rose by 114,000 in July, falling short of the market expectation of 175,000 and coming in below June’s increase of 179,000.

The recent jobs report showed that US Non-farm Payrolls rose by 114,000 in July, missing the market expectation of 175,000 and falling below June’s increase of 179,000.

This slower-than-expected growth may lead the Federal Reserve to reassess their monetary policy decisions, potentially considering rate cuts later in the next Fed meeting slated for September.

Historically, a dovish Fed lowering interest rates often increase investor appetite for riskier assets. Hence as the prospects of a Fed cut grows in the coming week, risk-assets, ranging from stocks to cryptocurrencies will likely attract increased market demand.

This dovish expectations could encourage US-based investors, especially institutional players investing  11 actively trading BTC ETFs to begin making strategic Bitcoin purchases to front-run the next Fed rate cut.

If this scenario plays out, Bitcoin bulls can expect to avoid a breakdown below the psychological support at the $55,000 level in the week ahead.

BTC Price Forecast: Neutral Bias Favours $62,000 Rebound

Bitcoin’s recent price action suggests a neutral bias, leaning towards a rebound to $62,000, as the Relative Strength Index (RSI) has bounced off the oversold region (30) and is currently at 43.

The Bollinger Bands indicate a contraction in volatility, suggesting a potential breakout. The upper band ($61,300) and lower band ($56,800) will be key levels to monitor. A move above the upper band could confirm the rebound, while a break below the lower band would indicate further weakness.

While the technical indicators suggest a neutral bias towards a $62,000 rebound, Bitcoin’s price action will ultimately depend on market sentiment and external factors. A cautious approach is recommended, with key resistance and support levels at $56,800 and $61,300 to guide trading decisions for the week ahead.