BTC Consolidation as Altcoin Season Erupts; Fed Watch Intensifies

Week five of the final trading week of July sees Bitcoin (BTC) exhibit a cautious “wait and see” attitude following its re-test of the $123,000 psychological high. During this consolidation phase, the spotlight has increasingly shifted towards the broader altcoin market.

Consolidation Breaks Amidst Rising Liquidation Concerns

Price action around the $123,000 mark saw short-term volatility, dipping near the $116,000 level before recovering. This pattern, characterized by “long wick” candles, occurred as selling pressure briefly overwhelmed market sentiment. Liquidation levels, particularly around the $115,300 and $114,000 areas identified via CME futures and Binance heatmaps, are drawing concern among traders.

“$BTC Closed its CME gap straight away after futures opened… This is the 6th week in a row where any gap was closed on Monday or close to it.” – Daan Crypto Trades

Shallow Price Targets Emerge

After setting a new all-time high, the next significant price targets for BTC are centered around the $150,000 level as a cycle top. Analysts project a temporary consolidation, suggesting a pause before the next upward leg.

Forecasts vary, with $130,000, $137,000, and $145,000 being discussed targets over the coming weeks. Longer-term peaks over $160,000 are also posited by some. However, the immediate correction targets, including the 6th consecutive weekly low for a CME gap, are gaining trader focus.

“We‘re heading into a quiet week… Wicks to the upside but price not progressing any further: a sign that market makers build shorts.” “Biggest individual liquidation level at $115.3k adds more weight.” “ – CrypNuevo

Fed’s Powell under Scorching Gaze

This week features another testimonial appearance by Federal Reserve Chair Jerome Powell, adding to the ongoing political pressure for his resignation amid President Trump’s criticism and market volatility. The Fed’s stance on interest rates is crucial for risk assets.

Current market expectations for a Federal Open Market Committee (FOMC) rate cut in July stand at an extremely low probability, estimated below 5% by the CME Group’s FedWatch Tool. Recent economic data and inflation reports have further complicated the anticipated path of monetary policy.

“Rising inflation and strong economic data cloud the outlook for interest rate cuts… Market odds are even on a quarter-point rate cut in September or no cut at all.” “ – Mosaic Asset Management

Altcoin Dominance Crashes, Sparking “Altseason” Fears

While Bitcoin consolidates, the altcoin market is surging, marking the beginning of what many are calling “Altseason.”

Ethereum (ETH) and XRP (XRP) led the charge last week, dragging the broader altcoin market alongside. This shift has significantly eroded Bitcoin’s market dominance, which saw its 4-year high percentage fall below 66% over the last week – a substantial decline. Proponents argue the altseason is here, while others see volatility, possibly a short correction, before the ongoing uptrend.

“Altseason is here.” – Swissblock head macro economist Henrik Zeberg

BTC Flows to Exchanges

On-chain data from CryptoQuant highlights a record high in Bitcoin reserves on centralized exchanges. This signals ongoing profit-taking by long-term holders. Additionally, significant inflows from whale wallets continue to be monitored, though not yet at the levels characteristic of prior market tops.

The confluence of exchange accumulation and consolidation suggests the market is in a potential corrective or pre-hype phase, as anticipation of altcoin performance drives capital allocation ahead of trading events.