Indeed, the failure to hold the 121,500 level on 14 July and the subsequent correction on 15 July occurred on very strong volume, meaning that traders are uncertain about the next big move and doubt that a rally can be sustained in the short term. Furthermore, fundamentals have turned sour lately. After a 0.1% increase in May, U.S. consumer prices rose 0.3% in June, a roughly 3.5% annual rate, which is uncomfortably above the Fed’s target rate. This renewed inflationary pressure diminishes the likelihood of a September interest rate cut by the Fed and may exert bearish pressure on equity and crypto valuations. A similar scenario is evident in other major economies. For example, UK CPI rose to 3.6% in June from 3.4% in May and also undermined the widespread anticipation of a rate cut by the Bank of England (BoE). In other words, the global monetary policy may not be as accommodative as investors had hoped for previously, making them reluctant to purchase in risky assets
Three BTC price action scenarios
Kar Yong Ang of Octa Broker has come up with three potential scenarios for BTCUSD.
The most optimistic scenario envisions a continued upward climb beyond current highs, driven by persistent institutional inflows and favourable regulatory developments. However, given signs of short-term overextension and waning upside momentum on the daily chart, this outcome appears less likely in the short term.
There is the risk of a deeper, prolonged correction, particularly if macroeconomic headwinds or regulatory setbacks dampen sentiment. While not impossible, this scenario is seen as less probable for now, given strong underlying fundamentals such as limited BTC supply and sustained demand from ETFs.
A more probable, base-case scenario is a modest correction toward support levels, followed by a resumption of the broader uptrend. Such a pullback would allow the market to consolidate and establish a stronger foundation, ultimately preserving the bullish structure while shaking out weak hands.
Kar Yong Ang comments: ‘Bitcoin looks a little stretched right now, and you can see it struggling to punch clean through resistance at the highs. A pullback into the $112,000–105,000 area would actually be healthy—that’s where smart money will likely step back in. The fundamentals are still stacked in Bitcoin’s favour: supply is tight, ETFs money keeps flowing, and regulatory progress is finally breaking through’.
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