Bitcoin is currently trading at $43,000. The crypto community is excited about this. Due to sideways price movements following Federal Reserve commitments to lower balance sheets, this is why there has been so much excitement.
Bitcoin and Crypto Market Crashes
The price of bitcoin fell below $44,000 shortly after the Federal Reserve’s December FOMC meeting notes re-confirmed efforts to regulate the balance sheet.
After minutes from the Federal Reserve’s December FOMC meeting revealed that the regulator is dedicated to reducing its balance sheet and hiking interest rates in 2022, Bitcoin (BTC) and the wider cryptocurrency market plummeted as stock markets pulled back at the closing bell.
BTC’s price dropped to $43,000 as stock markets corrected. The result was a tsunami of liquidations, totaling $222 millions in less than an minute.
Markets in Bloodbath Source: Coin360
TradingView data shows that Bitcoin experienced a selling wave, pushing it to $43,717 intraday after having bounced around for support at $46,000 for several days.
BTC/USD crash to $43k TradingView
It is expected that the Fed will begin raising its benchmark interest rate in March, “which would mean that balance sheet reduction could start before summer.”
Similar article| Altcoin Underdogs Outperform Bitcoin To Kick Off 2022
Rekt Capital Foreshadows Similarities
This chart was created by posted by crypto analyst and pseudonymous Rekt Capital, showing the “many similarities between this BTC range and May 2021.”
BTC/USD 1-week chart. Source: Twitter
Rekt Capital says so.
“Both saw BTC consolidate inside two Bull Market EMAs (i.e., green 21-week & blue 50-week EMA). If BTC is to repeat history, a capitulation event could take place where BTC briefly deviates below the blue 50 EMA.”
A prolonged bear market is possible if the price falls below $46,000. BTC could retrace back to low $30,000.
The Securities and Exchange Commission (SEC) of the United States postponed its decision on NYDIG’s spot bitcoin exchange-traded fund by 60 days on Tuesday (ETF). This delay caused a negative mood in crypto markets with many tokens seeing a rapid sell-off after the announcement.
Read More: Bitcoin Open Interest Reaches Dangerously High Prices, What’s Next?| Bitcoin Open Interest Reaches Dangerously High Values, Leverage Flush Coming?
Featured Image from Unsplash.com. Charts by TradingView.com. Coin360