Bitcoin Bulls Show Resilience, Ethereum's Resistance Battle Rages On

 | Jul 17, 2023 22:30

  • Bitcoin has traded within a narrow range between $30,000 and $31,500 for a month
  • The crypto may undergo another correction before eyeing higher levels
  • Meanwhile, Ethereum has found it difficult to surpass the $1,950 - $2,025 zone

    • Bitcoin has been trading within a relatively narrow range between $30,000 and $31,500 for about a month, indicating a prolonged period of consolidation. During this time, bulls and bears have been locked in a battle for control.

    A similar situation occurred in March 2023, although it lasted for a shorter duration. The cryptocurrency exhibited increased volatility after remaining within the $26,000 to $28,000 range. It broke through the $30,000 mark but faced significant resistance in April. As selling pressure intensified, it dropped below $25,000 eventually.

    After a mixed performance in April, it entered the summer months with a correction, declining due to the impact of macroeconomic data as the Federal Reserve continued to raise interest rates in May. The market also experienced a downturn following the SEC's lawsuit against cryptocurrency exchanges in early June. However, the negative impact of the SEC's actions was quickly overcome by positive news when BlackRock) filed for a spot ETF application.

    Subsequently, with the Fed's interest rate hike in June and the significant news of the ETF, the market returned to the $30,000 range, which is considered a psychological support level for cryptocurrencies. The focus now lies on how Bitcoin will break out of this consolidation phase.

    Following last week's release of US inflation data, attention has shifted to the Federal Reserve. Although headline inflation has shown a downward trend, core inflation remains stubbornly high, leading to expectations of a 25 basis point interest rate hike by the US Federal Reserve this month. The Fed's interest rate is a crucial benchmark for risk markets, placing pressure on Bitcoin's upward movement.

    Moreover, the summer brings rising temperatures, potentially increasing mining costs. Additionally, the record-high mining difficulty for BTC has prompted miners to sell, creating another hurdle for Bitcoin's progress in the cryptocurrency market, despite favorable conditions.

    On a different note, the recent interim decision in favor of XRP/USD triggered a rally, but its impact on Bitcoin was limited. This event mainly affected the altcoin market. On the other hand, Bitcoin faced selling pressure when attempting to break the $31,500 resistance level, causing it to retreat to the lower end of the trading range and relinquish its recent gains.