Bitcoin price turned down after the U.S. The Federal Reserve kept interest rates at their current level on July 31.
Data from TradingView revealed that BTC fell from a high of $66,837 on July 31, dropping 5% to an intraday low of $63,534 on Aug. 1. The big crypto has painted four bearish daily candles, extending the lows below the 50-day and 100-day exponential moving averages (EMAs).
BTC’s price action follows the decision of the Federal Open Market Committee (FOMC) to hold the benchmark federal funds rate between 5.25% and 5.50%, as most analysts predicted.
"Inflation has eased over the past year but remains somewhat elevated," said the central bank in a statement. "The economic outlook is uncertain, and the [FOMC] is attentive to the risks to both sides of its dual mandate," the statement continued.
“Job gains have moderated, and the unemployment rate has increased but remains low. Inflation has eased over the past year but remains somewhat elevated. In recent months, there has been some further progress toward the Committee's 2 percent inflation objective."
Regarding the possibility of a rate cut, the central bank said, "the Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."
"In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage‑backed securities," the FOMC statement added.
Bitcoin traded around $64,220 at the time of writing, down 3.24% over the past day.
Accompanying Bitcoin’s performance are massive liquidations across the crypto market. According to data from Coinglass, more than $225.27 million leveraged crypto positions have been liquidated over the last 24 hours, with $185.27 million liquidated over the last 12 hours alone.
Long Bitcoin liquidations amounted to $50.8 million, with the tally continuing at the time of publication.
This means that long traders were caught off-guard on BTC’s drop below $64,000. The largest single liquidation order occurred on OKX involving an ETH/USDT trade valued at $4 million.
The BTC price had formed a horizontal parallel channel on the daily chart, as shown below. Bitcoin’s drop below $65,000 on July 31 saw the big crypto break below this neutral chart pattern, confirming a downward breakout.
The BTC bulls ensured that the price produced a daily candlestick close above support provided by the 50-day and 100-day EMAs at $63,600. Apart from this crucial support level, the price also sits above a crucial support level at $59,538, embraced by the 200-day exponential moving average (EMA).
All the major moving averages are facing upward, suggesting that the bulls were still in control of the price. As such, increased buying from the current levels will see the price rise further, first toward the ;lower boundary of the rectangle at $65,300 support level and higher to collect the supply-side liquidity toward the $65,000 psychological level.
On the downside, a daily candlestick close below $63,600 would indicate the inability of the buyers to initiate a recovery. The BTC price will drop lower to seek solace from the 200-day EMA and later move toward the July 5 swing low at $53,499.