Bitcoin (BTC) Faces Pressure as US Retail Sales Data Looms Over Fed Decision

Bitcoin Extends Losing Streak to Three Sessions

On Monday, September 16, BTC declined by 1.69%, following a 1.31% loss from the previous day, closing at $58,164. Notably, BTC underperformed the broader crypto market, which fell by 1.36% to a market cap of $1.987 trillion. US BTC-spot ETF market flow data likely impacted BTC more.

Fed Rate Cut Jitters Weigh on BTC Demand

On Monday, September 16, speculation about Wednesday’s Fed interest rate decision influenced the appetite for riskier assets. Rate-sensitive tech stocks trended lower, leaving the Nasdaq Composite Index down 0.52% at the beginning of the week. BTC and the broader crypto market experienced losses.

The global markets remain divided on whether the Fed will cut rates by 25 or 50 basis points. On Wednesday, the Fed could signal aggressive rate cuts to prevent a hard US economic landing, which may fuel a flight to safety. Policy measures to avert a deep recession would impact demand for riskier assets.

According to the CME FedWatch Tool, the chances of a 50-basis point September Fed rate cut increased from 50.0% on Friday, September 13, to 62.0% on Monday, September 16.

This uncertainty about the Fed rate path and US economic outlook overshadowed news of MicroStrategy (MSTR) acquiring 18,300 BTC.

US BTC-spot ETF Market Sees Inflows Slump

On Monday, the US BTC-spot ETF market experienced a sharp drop in inflows as the Fed interest rate decision and press conference looms. According to Farside Investors:

• Grayscale Bitcoin Trust (GBTC) saw net outflows of $20.8 million (previous day: +$6.7 million).
• Fidelity Wise Origin Bitcoin Fund (FBTC) had net inflows of $5.1 million (previous day: +$102.1 million).
• Franklin Bitcoin ETF (EZBC) reported net inflows of $5.0 million (previous day: +$5.2 million)

Excluding iShares Bitcoin Trust (IBIT) and Valkyrie Bitcoin Fund (BRRR) flows, US BTC-spot ETFs saw $3.0 million in net outflows, compared with net inflows of $263.2 million on Friday, September 13.

US Economic Calendar: Retail Sales in Focus

On Tuesday, September 17, US retail sales figures may influence the Fed rate path. Economists forecast retail sales to increase by 0.2% in August, down from 1.0% in July.

Better-than-expected retail sales may ease fears of a hard US economic landing as private consumption contributes over 60% to GDP. Falling concerns about a US recession could temper expectations of a 50-basis point September Fed rate cut, possibly pushing BTC toward $60,000. Conversely, an unexpected fall in retail sales may fuel speculation of a hard landing and a BTC drop toward $55,000.

Investors should remain alert as sentiment toward the Fed rate path and the US economy could influence BTC demand. Stay updated with our latest news and analysis to manage exposure to BTC and the broader crypto market.

Technical Analysis

Bitcoin Analysis

BTC hovers below the 50-day and 200-day EMAs, affirming bearish price signals.

A breakout from the 200-day and 50-day EMAs would support a move to the $60,365 resistance level. Furthermore, a break above the $60,365 resistance level could give the bulls a run at the $64,000 resistance level.

US retail sales, Fed interest rate cut bets, and BTC-spot ETF market flow trends require consideration.

Conversely, a fall through $57,500 could give the bears a run at the $52,884 support level.

With a 47.96 14-day RSI reading, BTC may fall to the $52,884 support level before entering oversold territory.

Ethereum Analysis

ETH remains well below the 50-day and 200-day EMAs, affirming bearish price signals.

An ETH break above the $2,403 resistance level could give the bulls a run at the $2,500 level. Furthermore, a return to $2,500 may signal a move to the $2,664 resistance level.

US ETH-spot ETF market-related updates also require consideration.

Conversely, an ETH break below the September 6 low of $2,150 and the $2,124 support level could signal a drop below $2,000.

The 14-period Daily RSI reading, 37.95, suggests an ETH fall to the $2,124 support level before entering oversold territory.