Bitcoin’s price is stuck in a tight range following yesterday’s monetary policy announcement from the US Federal Reserve (Fed). Macro forces have taken over global markets, increasing correlation across asset classes.
For a look at how the Fed’s 75 basis point hike affected the price of Bitcoin and a look at the internal dynamics of the crypto market, read our Editor-in-Chief Tony Spilotro’s analysis. link below:
At the time of writing, bitcoin price is trading at $18,900 with losses of 2% and 7% respectively in the last 24 hours and 7 days. The entire crypto top ten by market cap is seeing losses over the same period, with the exception of XRP, which continues the uptrend with a 29% surge over the past week.
BTC price is moving sideways on the 4-hour chart. Source: BTCUSDT trade view
Why bitcoin price needs more devotion
As NewsBTC reported yesterday, with the Ethereum “merger” the cryptocurrency market has completed all major price catalysts in the short term. Now the market is moving in line with macroeconomic factors and traditional markets.
If the major financial indexes tend to trend one way or the other, it could offer room for a recovery rally or further downside. There was “little commitment” to the S&P 500, according to Jurienne Timmer, director of macro at investment firm Fidelity.
Despite the fact that the stock index has been in a downtrend since hitting its current level of 3.837 at 4.819, Timer believes the market has been resilient and may need more effort before it bottoms. Is. Via Twitter, the expert shared the following chart, saying:
It’s surprising how little dedication there has been in the market. Yes, the sentiment polls are all negative, but the real flow hasn’t materialized. This seems to correspond to the lack of volatility (…) in the market.
The S&P 500 is far from its 2020 low. Source: Jurienne Timmer via Twitter
The above aligns with that of analyst Dylan LeClaire in previous Bitcoin cycles. Analysts believe BTC is bottoming after mining sector “final capitulation.” This event may cause the network hashrate to crash, which remains to be seen. Leclair Said,
I believe something similar will happen again, with macro conditions as the catalyst. We’re not there yet.
Will Bitcoin Retest Its 2020 Lows?
But how low can the price of Bitcoin and the crypto market crash? The benchmark cryptocurrency is already trading 80% below its all-time high of $69,000. This has historically marked a bottom for BTC price and created a barrier to further downside.
In this sense, instead of a new phase, the cryptocurrency could see another sideways movement in 2022 as the Fed continues to push interest rates and the trend of traditional markets lower. This thesis can be supported by possible downward pressure for the US Dollar (DXY).
The currency is trending higher against the price of bitcoin and the risk-off asset, but appears to be in a key area of resistance. This could provide room for a recovery rally in the crypto market. As seen in the chart below, the DXY Index could trend up to see an increase in selling pressure.
DXY Index (US Dollar) is approaching resistance. Source: Jackis (@i_am_jackis) via Twitter