After retesting the $60,500 support multiple times in the last month, Bitcoin price plunged below the key level on Wednesday. Other digital assets also took a nosedive due to a strong sell-off in Ethereum price which dropped to its lowest level in the last 10 weeks.
The Bitcoin dominance also fell 1.05% on Wednesday as the demand for stablecoins soared. Consequently, the USDT dominance was up 4.45% on the same day. Side by side, a notable decrease of $15.2 billion in the Total3 market cap was also observed.
The US Federal Reserve is set to make its key policy decision on interest rates on May 1. According to the CME Fed Watch Tool, there is a 99% probability that the central bank will keep the interest rates at 5.25%-5.50%. The reason behind this outlook is the stagnant inflation which still seems to be far above the Fed's target of 2%.
As a result, market participants are aligning themselves with the possibility of prolonged high interest rates. Recent economic data from the US has also aggravated recession fears, with below-expectations GDP growth in the second quarter. These factors are contributing to the ongoing downtrend in the Bitcoin price.
From a technical standpoint, the BTC/USD outlook seems to have flipped bearish. The price of the pioneering cryptocurrency is hanging by a thread as a daily closure below $59,000 will break the bullish market structure on the daily timeframe. This may send the entire crypto market into a deep consolidation that could last weeks or months.
In case of a deeper pullback from current levels, the price is expected to find strong support at the $52,000-$50,000 demand zone. To avoid this bearish Bitcoin price prediction, bulls need to reclaim the $60,500 support level which may now act as a resistance.
The recent launch of Ethereum and Bitcoin ETFs in Hong Kong has seen a very low volume on the first trading day. This increased the demand concerns among the major holders who accumulated the asset in anticipation of a massive uptrend post-halving.
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