Bitcoin price clings to $30,000 amid bear market signals

Bitcoin is entering its fourth week clinging to the $30,000 mark, as analysts warn of looming bear market signals.

The price of the world's largest cryptocurrency declined 0.1% in the past day to $30,385 at 8:00 a.m. EDT, according to CoinGecko.

In mid-June, Bitcoin jumped 12% passing the $30,000 mark after news of BlackRock's spot ETF filing. But, since then the digital asset's price has plateaued.

Hawkish signals from the Federal Reserve

Last Tuesday saw the release of the Federal Reserve June meeting minutes, revealing contention amongst officials over the recent rate hike pause, and a consensus to raise rates in coming months. "The market continues to anticipate higher rates, with talk of two more rate hikes later this year," chief economist at BTCM Youwei Yang told The Block. Raising rates contracts the outstanding money supply, slowing growth and drying up investor appetite for risk assets such as Bitcoin.

The next FOMC meeting is July 26. "The probability of a 25 basis point rise at the meeting has increased to approximately 92%, up from 51% just a month ago," Yang added. 

This was a view echoed in a note by Oanda market analyst Ed Moya. "Bitcoin remains stuck around the $30,000 level as Wall Street awaits any U.S. Bitcoin ETF update and as market expectations for a 25 basis point hike at the next Fed meeting seems very likely." Moya added the digital asset appears locked in a range as investors wait months before receiving a concrete update on spot Bitcoin ETF filings.

CPI inflation data

US inflation data for June is set for release this Wednesday. The CPI is expected to come in at 3.1% year-over-year, a cooldown from a 4% annual increase in May. However, Yang stressed this monthly CPI decline is not enough to change the Fed's rate trajectory, which would favor bulls. "The Fed considers at least three consecutive months of substantial consistency before easing up," he added.

Yang added that bears are placing their bets on the persistent stickiness of subsequent inflation readings to not favor bulls. "Bears are still concerned about sticky inflation that may even rebound if the Fed loosens its monetary policy too soon," he added.

Bond yields signal banking stresses

Rate rises can result in uncertain macroeconomic conditions. Yields on the benchmark 10-year U.S. Treasury note surpassed 4% for the first time since early March, and the two-year U.S. Treasury yield reached its highest level since 2007.

Yang said higher yields could see U.S. banks "experience increased unrealized losses on their bond holdings in the second quarter, a development that could reignite concerns about the health of regional banks, which were initially raised by Silicon Valley Bank in March."