- Bitcoin price has suffered bearish sentiment in the past seven weeks below $120k.
- Rising demand for altcoins led by Ethereum and Chainlink has slowed BTC’s bullish sentiment.
- High-impact news this week will cause higher BTC volatility amid an anticipated parabolic bull rally.
Bitcoin (BTC) price opened Monday in correction mode after the weekly candle closed as a bearish “inverted hammer.” The price of BTC dropped 3% in the past 24 hours, hitting a low of about $114,740 before rebounding above $115 during the mid-London session.
The wider altcoin market followed in the mild correction, thus resulting in heavy long liquidations. According to market data analysis from CoinGlass, more than $552 million was liquidated from the crypto market today, out of which over $483 million involved long traders.
Top Reasons Why Bitcoin Price Dropped Today
Liquidation of Long Traders
Bitcoin price experienced bearish sentiment today due to the heavy liquidation of long traders. A long squeeze occurred as a result of more long traders converting to midterm short traders.
Hotter than Anticipated U.S. Inflation
Bitcoin price extended last week’s losses, which were triggered by the hotter-than-expected Producer Price Index (PPI). Although President Donald Trump disputed the presence of inflation, crypto traders have begun factoring in a potential hold in the rate decision next month.
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High-Impact Events This Week to Consider
Bitcoin and the wider altcoin market will experience heightened volatility in the coming days fueled by several high-impact events. Moreover, crypto traders’ greed remains palpable, as shown by the peak in Google searches for Ethereum (ETH).
On Wednesday, the Reserve Bank of New Zealand is expected to initiate a 25 bps rate cut to 3%. Before the end of Wednesday, the U.S. Federal Reserve will release FOMC meeting minutes, which will impact traders’ expectations on September’s interest rate decision.
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On Thursday, the U.S. Department of Labor will release data on the number of individuals who filed for unemployment insurance for the first time during the past week. Wall Street analysts forecast a slight increase from 224k to 227k, which will impact next month’s interest rate decision.
On Friday, Fed Chair Jerome Powell will attend the Jackson Home Symposium about the economic outlook and monetary policy framework. According to analysts at Mitsubishi UFJ Financial Group, the U.S. dollar may rise if Chair Powell avoids clear rate-cut signals on Friday, unlike last year when remarks preceded a 50 bps cut.
What’s BTC Midterm Targets
Bitcoin price has experienced a heightened resistance level around $120k in the past seven weeks. In the daily timeframe, BTC price has formed a potential midterm reversal pattern, which is characterized by higher-highs coupled with bearish divergence of the Relative Strength Index (RSI).
According to crypto analyst Michaël van de Poppe, the BTC price is possibly in the final correction before takeoff towards $160k soon. However, Poppe noted that if BTC price does not regain the support level above $116k soon, a further correction towards $112k will likely occur before the market rebound.
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Source: https://coinedition.com/bitcoin-price-analysis-key-targets-to-consider-amid-high-impact-news/