Bitcoin reached the area where it was at its highest level, and was therefore rejected. As it trades in tight range, the first cryptocurrency by market capital could reach its previous lows.
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Bulls could get some help from the Bitcoin Miami Conference 2022. The event is usually filled with positive announcements with a direct impact on BTC’s price.
The macro-factors that prevented Bitcoin and other risky assets from reaching new heights are gaining relevancy. Although the tapering of the U.S. Federal Reserve’s (FED), was within budget, could become more aggressive as inflation continues.
Bitcoin is trading at $43,900 as of the writing. There has been a loss of 5% in the past 24-hours, and 7 days.
Bitcoin’s daily volume must be at least $44,000 to avoid any further losses. Data from Material Indicators records little support for BTC’s price until around $42,000. BTC may be forced to return to the current low levels by short-term selling pressure.
Mike McGlone is a Senior Commodity Strategist at Bloomberg Intelligence. He said that benchmark crypto showed a buying sign in its BI Trend Signal. This analyst uses momentum to gauge market momentum. He said it is the first time that BTC has turned bullish since late 2021.
Below you can see that the signal has experienced major rallies during the last seven years. McGlone said the following about the potential of Bitcoin to recover higher levels.
Over the seven-year period, there were 30 signals with 66% being notionally profitable. Although macro factors continue to be unfavorable while the wider pattern remains a wide range of $30,000-$70,000 the rally might have legs similar that of August 2021 which preceded an rally of 65%.
The Strong Dollar could be a strong opponent to Bitcoin
The current price decline is likely to be fueled by the U.S. Dollar rally. This is likely due to rising US inflation and the ongoing conflict in Ukraine.
The U.S. Dollar has been in an upward trend for nearly a year, as shown below. As investors try to protect their assets, more uncertainty on global markets has led to greater appreciation of the dollar. In May 2021 the currency hit a low point near the 89 mark.
FTX Access believesThe upcoming meeting of the FED Federal Open Market Committee, FOMC (Fed Federal Open Market Committee) could pose a temporary problem for the crypto market. The financial institution may become more hawkish and raise their interest rates by 25bps to 50bps, as previously mentioned.
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FTX Access advised traders to keep an eye on the FED balance sheets. This could provide more clues into the institution’s approach to the inflation issue and the aggressiveness of their monetary policy. FTX Access stated:
It’s possible that this meeting was too soon to get a QT plan agreed, but given how far they are falling behind inflation it seems quite likely that we do FOMC officials have guided us that the balance sheet unwind will be faster than last time (which started at $10b/month).