Fed and AI Stocks Double Whammy...Will Bitcoin (BTC) Fall Further?

▲ Bitcoin (BTC), decline/AI generated image

The cryptocurrency market capitalization fell to $2.17 trillion due to a combination of caution ahead of the US Federal Reserve's interest rate decision and a correction in AI semiconductor stocks.

According to crypto media outlet BeInCrypto on July 29 (local time), the cryptocurrency market showed weakness ahead of the Federal Reserve (Fed)'s benchmark interest rate announcement. The market largely reflects the possibility of the Fed freezing its benchmark interest rate at 3.5% to 3.75% for the fifth consecutive time. As the prospect of an interest rate freeze became dominant, the decline in market capitalization was limited.

The total cryptocurrency market capitalization regained the $2.16 trillion support level. If this support level is maintained, $2.2 trillion and $2.29 trillion are presented as upper targets. If $2.16 trillion breaks down, a decline path could open up to $2.12 trillion, followed by $1.99 trillion.

The correction in AI semiconductor stocks also put pressure on risk assets overall. The 60-day correlation coefficient between KOSPI and Nasdaq 100 rose to 0.50, marking its highest level since 2021. As Samsung Electronics and SK Hynix account for more than half of KOSPI's market capitalization, the Korean stock market is also strongly linked to the US AI investment trend.

Bitcoin (BTC) showed a maximum correlation of 0.88 with the Nasdaq index. When KOSPI fell 8% and Nasdaq 100 fell 1.88% on July 13, the selling pressure spread to the cryptocurrency market. This indicates that Bitcoin exhibited characteristics of a risk asset moving with tech stocks rather than an independent safe-haven asset.

Pump.fun (PUMP) fell about 7% in 24 hours but rose about 31% on a monthly basis. If the $0.00182 support is maintained amid decreasing selling pressure, a cup-and-handle pattern is also valid. If $0.00224 is broken, the target upside is 93%, with $0.00265 and $0.00316 as the next target lines. A break below $0.00159 weakens the bullish structure, and a drop to $0.00114 is the pattern invalidation criterion.

[Article Key Summary]

-The cryptocurrency market capitalization fell to $2.17 trillion amid caution ahead of the Fed's decision.

-The correlation coefficient between KOSPI and Nasdaq 100 rose to 0.50, marking its highest level since 2021.

-PUMP fell about 7% in 24 hours, but a target upside of 93% was presented if $0.00224 is broken.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*