Why is the price of Bitcoin down today?
Bitcoin (BTC) started August during the US presidential election as the market's focus turned to the latest Federal Reserve interest rate guidance and the possibility of Kamala Harris improving on the US presidential election.
The Fed remains unchanged for the month of July.
On July 31, Federal Reserve Chairman Jerome Powell said he would keep interest rates unchanged at the current 525-550 basis points, though he would favor a September cut if inflation continues to decline.
Bitcoin's slide began at Powell's conference, eventually falling 5% to $63,400 on August 1.
BTC's price reaction is similar to previous reactions to the Fed's rate decisions in 2024.
For example, after the June 12 Federal Open Market Committee (FOMC) meeting, prices fell by around 7.25%. Likewise, it fell more than 7% after the FOMC's May 1 meeting.
This bearish pattern after each FOMC meeting reflects a growing risk-averse trend among investors. As the Federal Reserve's policy decisions and economic outlook create uncertainty, investors often reduce their exposure to riskier assets, which is why Bitcoin's price is lower today.
Kamala Harris could beat Trump.
Bitcoin prices fell further today as Kamala Harris' chances of winning the US elections in November increased, as she drew closer to her pro-crypto opponent Donald Trump.
In the year On July 31, Harris gained ground in key swing states for the first time since launching her presidential campaign, with a 48% approval rating against Trump's 47%.
If investors realize that there is an increased chance of strict cryptocurrency regulations under democratic governance, the price of Bitcoin may decrease. Locating Harris in key swing states could amplify those concerns.
Related: Bitwise exec says, ‘We're not bullies enough,' amid political swing to crypto
Mt. Gox moves another BTC track
Bitcoin's decline today follows the July 30 transfer of 47,000 BTC worth approximately $3.02 billion from Mount Gox to crypto exchanges Kraken and Bitstamp. This transfer is part of the process of distributing proceeds to Matt Gox's creditors.
The timing of the transfer coincided with heightened selling activity on one of the listed exchanges, Kraken.
According to data analysis platform Glassnode, Bitcoin's spot cumulative delta (CVD)—a measure of the net difference between buying and selling—has moved to sellers since July 27, with Mt. Gox transaction was the highest of the day.
Bitcoin bounces back from months of resistance
From a technical perspective, Bitcoin's decline is part of an ongoing correction that started after testing the resistance of a multi-month falling trend line, which is part of a broader descending channel pattern.
Since August 1, BTC price has been above the 50-day moving average (50-day EMA, red wave) at around $64,300, moving back to the upper transformation line of the channel at around $68,250.
However, if Bitcoin decisively breaks below the 50-day EMA support, it may fall further into the region defined by the 200-day EMA (the blue wave) and the channel's downtrend. This range corresponds to around $59,500-54,500.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
