The Crypto Report Is Out. The Bulls Are Not Interested!
The Range Is Intact. Is Bitcoin Preparing for a Massive Breakout?
This week, the U.S. Federal Reserve decided to keep interest rates on hold for the fifth time in a row, as it was widely anticipated by market participants. Bitcoin took this pretty hard initially and dropped as low as $115,700. However, by the end of the day, the losses were erased and Bitcoin closed at $117,800, just 100 bucks lower than where it started the day.
Fed’s hawkish stance is likely to weigh on risk assets such as Bitcoin, and the decision to keep the rate steady will affect the crypto market going forward. At the time of writing, there’s a 60% chance of a rate cut in September, down from 65% just before Powell’s press conference that followed the rate announcement.
PayPal’s Crypto Adoption
But there’s good news too, which may help a crypto breakout. Earlier in the week, payments giant PayPal announced a game-changing initiative: the “Pay with Crypto” service. This will allow U.S. merchants to accept over 100 different cryptocurrencies. Consumers can connect selected crypto wallets to their PayPal accounts, and then the funds can flow between the crypto wallet and the merchant through PayPal’s platform. The service will also offer significantly lower transaction fees than credit cards.
PayPal’s move is yet another major step towards mainstream adoption and marks a pivotal shift from a few years ago, when Bitcoin was merely a curiosity or a purely speculative asset and totally disregarded by the major financial players.
In other news, the Digital Asset Markets Working Group created by President Trump in January has finally released its report and proposed a variety of ways to better implement digital assets into the U.S. infrastructure. White House officials stated the report is an essential step towards making the U.S. the leader of the blockchain revolution and flaunted expressions like “the Golden Age of Crypto”.
While the report is definitely a step towards mainstream adoption, it failed to ignite a significant rally across the crypto market. Some pundits considered that it failed to reveal a clear path forward and to provide practical clarity.
Chart Analysis – BTC/USD
Bitcoin is whipsawing, moving in a straight line, not up or down but completely sideways. It is currently changing hands around $115,500 and the candles remain small, with long wicks. Thursday’s candle showed a downside bias but it did not qualifies as a true break of the range.
This indecision and sideways movement leave the door open for strong moves once the pair escapes the range between $120K and $115K. There are strong fundamental tailwinds, which paint a bullish picture, but the lack of directional impulse means the best course of action is to wait for a clear break of one of the boundaries. Keep an eye on the release of the U.S. Non-Farm Payrolls later today because it could be a catalyst for a breakout.
