Bitcoin May Continue to Collapse After BTC / USD Breaks 19,000

07/01/2022By: C, Fiona

Abstract

  • US stock market ends quarter behind Asian stock market
  • Bitcoin plummeted amid risk caused by recession fears
  • BTC / USD is breaking the major support level at a price targeting the lower

Friday Outlook

Bitcoin prices plummeted overnight, alongside risky assets such as stocks and other cryptocurrencies, as Wall Street traders pushed the sell button for fear of a new recession. BTC / USD fell by more than 6% during the New York session, breaking through the 20,000 and 19,000 levels. The high-beta Nasdaq 100 Index (NDX) fell 1.33%, ending the volatile second quarter. The end-of-quarter rebalancing, the period during which the fund considers portfolio allocation, may have contributed to some of the bleeding of risky assets. The Asian stock market outperformed the US market with the Hang Seng Index (HSI) and China’s 300 post-gain in June.

Government bond yields were bid after US consumer spending (PCE) data crossed a cooler line than expected. The core figures used as a priority for the Federal Reserve fell from 4.9% in April to 4.7% in May. This indicates that inflation may have peaked as it has been declining for the third straight month. The data are likely to be promising for central banks, but the Fed is likely to stick to the July rate hike. Gold prices have fallen to their lowest levels since May 16th after the data.

According to an impressive report from the Federal Reserve Bank of Atlanta, GDP growth in the United States was downgraded from 0.3% to -1.0% in the second quarter. The slowdown in US growth is becoming more and more likely. Meanwhile, China on Wednesday showed signs of recovery in economic activity as covid deregulation eased. The NBS compound PMI rose from 48.4 in June to 54.1, a sharp change from shrinking to expanding. Despite the rosy data, iron ore prices fell on the third day.

This morning, Australia’s Ai Group Manufacturing Index for June rose from 52.4 in May to 54. This rise is a promising data point for the Australian economy amid rising economic uncertainty. New Zealand building permits fell 0.5% in May, but -8.6% in April. Both NZD / USD and AUD / USD won bids overnight. This is due to the dollar’s depreciation due to the depreciation of government bond yields

BTC / USD Forecast

 

bitcoin chart, btc
Trading View

Bitcoin recorded an astonishing 41.2% loss in June, the worst monthly performance ever. As it fell overnight, the psychologically significant 20,000 and 19,000 levels were removed and prices approached June’s lows of 17592.78. The following breaks will take the lowest price since November 2020. The Relative Strength Index (RSI) fell below 30 levels, highlighting extreme weaknesses that could last until July.