Bitcoin is facing short-term downside price action. As it attempts to recover the area surrounding its current high levels, Bitcoin has yet again been disqualified. It could then test its next crucial support zone.
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Bitcoin is trading at $45,500 as of the writing. There has been a loss of 2% in the past 24 hours and a gain over the week. While the benchmark crypto saw a temporary rally to these levels, bulls are unable sustain their momentum past this point.
According to Data from Material Indicators(MI), Bitcoin has been trending downwards and around $20 Million in bids orders could be used as support.
The largest support is $44,000, which holds $11 million worth of bids orders. MI records intensive selling from Binance order books, inventors have been dumping as much as $50 million in the last day which has contributed with BTC’s price downside action.
Bitcoin could not regain its highs, despite the resistance. MI reports more than $40,000,000 in sales orders and asks. Increased selling pressure suggests that the bears might take over price action in the short-term.
If the bulls are able to sustain current levels, which seems unlikely due to the above, BTC’s price could squeeze late shorters and make another run into $48,000 and $50,000. Bitcoin, however, has not been able to surpass these levels.
Since the start of 2022, BTC’s price has been moving in a close range between $35,000 to $48,000. More clarity surrounding the U.S. Federal Reserve’s monetary policy is what triggered this relief rally.
Retail investors have been driving the rally, and in very short periods, they were the only ones classifying buying this price action. Retail investors lack the necessary firepower to maintain these levels, which adds to the bearish thesis.
Will Clemente noted this. offered a different perspective:
This chart is very interesting. Retail (0-1 BTC) is currently buying at the second-highest rate in Bitcoin’s history. Looking at retail’s holdings most spikes have coincided with macro tops, but on several occasions, they have bought strategically. This spike is an exception.
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The U.S. FED has decided to start its tapering process, which was already mentioned. Although this could potentially have negative long-term implications for investors it was in line with market expectations.
The next year could see a new tightening of the economy. Bitcoin and other cryptocurrency could be benefited from changes in the financial system.
According to a report from QCP Capital, the global financial system has changed as a result of the confiscation of Russia’s savings. This was the response of the international community to Ukraine’s invasion.
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QCP Capital is confident that this will create a need for global and neutral assets. QCP Capital stated that:
The attractiveness of cryptocurrencies as an independent asset is rapidly growing. They are digitally storeable, fungible, and protected from international controls. In light of recent events, it is our view that we will soon see a major central bank or severing buy BTC – and that will be long-term bullish as BTC gradually moves towards being a reserve asset.