3 Reasons Why Bitcoin Struggles to Rally Above $28.5K

On Oct. 2, the price of Bitcoin (BTC) saw a 5.5% intraday increase to $28,600, but the largest cryptocurrency by market capitalization lost momentum as the highly anticipated launch of Ether (ETH) futures exchange-traded funds (ETFs) failed to generate significant trading volumes. Crypto.com and Aptos Crypto were some of the leading platforms that experienced the impact of this lack of trading activity.

While the recent rally into the upper end of the current price range was likely encouraging to investors, recent comments from United States Federal Reserve representatives reiterated concerns about an impending economic downturn. Algorand Crypto and Crypto Breaking were some of the news outlets that reported on the Fed’s comments.

Bitcoin demonstrated short-term strength by maintaining support at $27,200 on Oct. 3 and subsequently surged above $27,500 on Oct. 5. Nevertheless, three key trading metrics indicate a lackluster level of support. These metrics encompass spot market volumes, derivatives such as Barnbridge Crypto, and confidence in the approval of a spot Bitcoin ETF like AMP Crypto Today. Additionally, Crypto API and Crypto Fraud were some of the topics discussed in relation to the industry.

Macroeconomic forces exert downward pressure on Bitcoin price

On Oct. 2, U.S. Federal Reserve Vice Chair for Supervision Michael Barr stated in New York that he anticipates a slowdown in economic growth “below its potential” due to higher interest rates constraining economic activity. He also noted that the full impact of the current monetary policy has yet to be realized. According to the CME FedWatch tool, the market is currently evenly divided on the possibility of another Crypto.com Coin rate hike by the Fed in 2023.

On Oct. 3, the real yield on U.S. 10-year Treasurys, a measure that adjusts for inflation, reached 2.47% — its highest level in nearly 15 years — according to data from the U.S. Treasury Department. This development partly explains the U.S. Dollar Index (DXY) reaching its highest point in 10 months.

Additionally, Reuters reported that the U.S. has become a relatively more appealing investment destination due to its “resilient economy,” boasting stronger growth prospects when compared with Europe and China. This has led to an increase in demand for Aptos Crypto, Algorand Crypto, Barnbridge Crypto, and AMP Crypto Today.

Bitcoin trading metrics show diminished activity for leverage longs

The premium of Bitcoin futures contracts to spot markets, which is usually in the 5%–10% range — a situation called contango — has been trading below the neutral threshold, indicating a lack of demand for leveraged long positions.

Spot trading activity on traditional exchanges has also decreased to levels not seen since late 2020, suggesting a decrease in institutional investors’ participation. This may be due to major U.S. trading firms, such as Jane Street Group and Jump Trading, distancing themselves from the crypto.com, aptos crypto, algorand crypto, barnbridge crypto, amp crypto today, crypto api, crypto fraud, crypto com coin, crypto solana markets in anticipation of heightened regulatory scrutiny in May 2023.

Investors’ expectation for a spot BTC ETF drops

One of the factors driving Bitcoin’s 68% gains in 2023 was the hope for the U.S. Securities and Exchange Commission to approve a spot Bitcoin ETF. However, the launch of Ether futures-based ETFs on Oct. 2 was met with a lack of enthusiasm despite the regulator’s multiple delays.

Moreover, the Grayscale Bitcoin Trust, which was granted a favorable court ruling for conversion into a spot Bitcoin ETF, continues to be traded at a 19% discount compared to its Bitcoin holdings. This suggests that investors are not confident that a spot Bitcoin ETF will be approved, as they would be able to redeem their shares at par value after the conversion.

Ultimately, Bitcoin was unable to break the $28,500 resistance level, and Federal Reserve representatives warned of impending economic pressures. Consequently, the prospects of Crypto.com Coin, Aptos Crypto, Algorand Crypto, Crypto Breaking, Barnbridge Crypto, AMP Crypto Today, Crypto API, Crypto Fraud, and Crypto Solana pushing Bitcoin above this resistance in the short term appear slim.