Cryptocurrencies, including Bitcoin, have continued to decline, remaining below their peak levels achieved earlier this year. This stagnant period for digital assets suggests that even significant U.S. inflation data may not have a substantial impact.
Bitcoin’s price has fallen by 1% in the last 24 hours, dropping below $29,500. The key support level of $30,000 had previously sustained the largest cryptocurrency for several months before experiencing a downward trend in late July.
According to Alex Kuptsikevich, an analyst at broker FxPro, “Bitcoin attempted to surpass $30,000 but encountered strong selling pressure.” The technical outlook favors the bears as they have successfully kept Bitcoin below its 50-day moving average. This indicates a shift in the medium-term trend from bullish to bearish. If the price drops below $28.8K, it could trigger a faster sell-off across the entire crypto market.
While low volatility is often seen as a precursor to another upward surge in digital assets, it may also indicate a more permanent shift for Bitcoin. This change is not necessarily beneficial for market dynamics.
Regardless of the underlying cause, this period of reduced trading activity could dampen the market’s response to key inflation data, specifically the U.S. consumer-price index (CPI) for July. Such data is expected to significantly impact the Dow Jones Industrial Average and S&P 500.
Antoni Trenchev, managing partner at crypto lender Nexo, commented on the situation, saying, “It’s noteworthy that unlike traditional finance, Bitcoin hasn’t benefited as much from decelerating U.S. inflation and the prospect of an imminent end to the U.S. tightening cycle. This provides further evidence of the summer crypto lull we are currently experiencing.”
Apart from Bitcoin, Ether, the second-largest cryptocurrency, experienced a minor drop of less than 1%, trading at $1,850. Other smaller cryptocurrencies, known as altcoins, also showed little movement, with Cardano and Polygon each slipping close to 1%. Memecoins, including Dogecoin and Shiba Inu, exhibited a similar lack of significant change, shedding less than 1% each.
