FX.co ★ Bitcoin needs more "blood"

The cryptocurrency market continues its corrections, with Bitcoin suffering the most among major assets. The market needs a new bottom to shake out the speculators before it can begin to rise steadily again, supported by fresh inflows from institutional players entering the market through spot ETFs.

Selling pressure is especially sharp as many traders who entered the market expecting an immediate rally are now locking in losses. This wave of selling creates additional downward momentum, exacerbating the overall bearish trend. Technical indicators also confirm the downward momentum, suggesting the potential breakdown of key support levels.

However, amid this turbulence, there are positive aspects. The correction allows for a reassessment of the fundamental value of assets and helps separate speculative projects from those with real value and long-term growth potential. Moreover, lower prices attract attention from investors who previously considered cryptocurrencies overvalued.

The key factor for further recovery will be capital inflows from institutional players.

If the Fed Chair decides to remain silent and does not hint at any rate moves during his speech today, the cryptocurrency market will continue to consolidate as traders eagerly await clearer signals and more attractive prices. Powell previously stated that the decision on interest rates in September would depend on macroeconomic data, despite continued pressure from President Donald Trump to lower borrowing costs.

On Wall Street, the expectation of a Fed rate cut in September remains widespread. The CME Group's tool currently estimates a 74.4% probability of a 25-basis-point rate cut in September. However, these expectations have been tempered by recent economic data that presents a mixed picture.

Trading recommendations

As for the technical picture of Bitcoin, buyers are currently focused on reclaiming the $114,100 level, which would open a clear path to $116,000, and from there, the next target is $117,500. The furthest target would be the high around $119,300, and breaking that would signal a strengthening of the bullish market. If Bitcoin falls, buyers are expected at the $113,200 level. A return below this area could quickly push BTC down to $110,600, with the furthest target being around $108,500.

As for Ethereum, an obvious breakout above the $4,376 level opens the way directly to $4,545. The next target would be the high around $4,710, and breaking that would indicate the strengthening of the bullish market and increased buyer interest. If Ethereum falls, buyers are expected at $4,237. A return below this level could quickly push ETH down to $4,077, with the furthest target being around $3,941.

What's on the chart

• The red lines represent support and resistance levels, where price is expected to either pause or react sharply.
• The green line shows the 50-day moving average.
• The blue line is the 100-day moving average.
• The lime line is the 200-day moving average.

Price testing or crossing any of these moving averages often either halts movement or injects fresh momentum into the market.