The past few sessions have been marked by consistent weakness in Bitcoin price action. The cryptocurrency has posted a decline of more than 3.00% on average over the last three trading sessions.
This renewed selling pressure can be partly explained by market expectations ahead of today’s Federal Reserve decision. This event has started to weigh on risk appetite for assets such as Bitcoin, particularly as alternative markets like bonds have become more attractive.
As a result, if the Federal Reserve adopts a more aggressive stance or reinforces the idea of higher rates for longer, the recent selling pressure could remain a key factor in Bitcoin’s short-term price action.
Demand begins to weaken consistently
Today’s session is particularly important due to the Federal Reserve’s interest rate decision. According to CME Group data, there is nearly a 100% probability that rates will remain unchanged at the current 3.75% level.
However, the market will be closely watching the post-decision commentary, as it may provide guidance on the future path of monetary policy for the rest of the year.
This environment could begin to weigh on confidence in risk asset demand, as a higher-for-longer rate scenario tends to limit available liquidity in the market, reducing capital flows into assets such as Bitcoin.
Additionally, US 10-year Treasury yields have shown a consistent recovery, with an upward trend now approaching the 4.4% level, even ahead of the central bank decision.
Source: TradingEconomics
All of this is already being reflected in a decline in activity across the Bitcoin network, which can be seen in the behavior of the Open Interest indicator. This metric, which measures the total number of open positions in the market, has dropped toward the $24.7 billion level, returning to levels last seen on April 21.
This decline, combined with the recent drop in price, suggests that the market has started to close long positions, leading to liquidations and a reduction in demand strength in the short term.
Source: CryptoQuant
Taking all of this into account, the recovery in bond yields becomes a key factor for Bitcoin, as this alternative market gains relative attractiveness in the short term. If the Federal Reserve reinforces a more restrictive stance, this could continue to limit market liquidity and, in turn, maintain pressure on demand for risk assets, potentially supporting the continuation of selling pressure in Bitcoin in the coming sessions.
Crypto market confidence fails to recover
Another relevant factor is the continued decline in crypto market sentiment indicators. The Fear and Greed Index has maintained a downward trend in recent sessions, falling toward the 40 level and approaching the “fear” zone once again.
This reflects a sustained loss of confidence, contrasting with the optimism seen in previous weeks.
Source: Coinmarketcap
This behavior suggests that the confidence-driven momentum that previously supported demand has started to fade. If this trend continues, conditions may not be sufficient to support a strong recovery in Bitcoin in the short term.
As a result, a continued decline in sentiment could remain accompanied by consistent selling pressure in the coming sessions.
Technical outlook for Bitcoin
Source: StoneX, Tradingview
- Bullish momentum struggles to hold: Although the recovery seen in recent weeks allowed Bitcoin to approach a break of its long-term bearish trendline, recent sessions show that this bullish move has failed to fully stabilize. In this context, rather than confirming a structural shift, the market appears to be entering a phase of indecision, which could persist in the short term.
- RSI: The RSI has shown a steady decline from previous highs, moving closer to the neutral 50 level. This indicates a weakening in bullish momentum and a growing balance between market forces, reinforcing the idea of a potential indecision phase.
- MACD: The MACD shows a similar pattern, with readings close to the zero line, reflecting a balance in short-term moving averages. This behavior suggests that neutrality could continue to dominate Bitcoin price action.
Key levels:
- 84,000 – Key resistance: A zone of previous highs aligned with the 200-period moving average. Price action approaching this level could reinforce a bullish bias and potentially lead to the formation of a more relevant short-term uptrend.
- 75,000 – Near-term barrier: A key psychological level and current reference zone. If the price fails to move away from this level, a more consistent sideways phase could begin to develop in the coming sessions.
- 72,000 – Key support: A downside barrier aligned with the 50-period moving average. A move back toward this level could reactivate the previous bearish trendline, bringing selling pressure back into focus in the short term.
Written by Julian Pineda, CFA, CMT – Market Analyst
Follow him on: @julianpineda25
