Bitcoin is falling as it approaches its mid level. According to reports, yesterday’s high volume of requests orders was $45,000. $48,000 could be a resistance level in the near term.
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Bitcoin currently trades at $43,748. This is a loss of 2.1% in 24 hours, and an increase of 14.1% in 7 days.
The market participants are wondering if Bitcoin’s current momentum can be sustained. The benchmark cryptocurrency is showing some weakness at the moment and tends lower throughout the day.
Data from Material Indicators suggest potential support for Bitcoin’s price around $43,500. The following shows that bid orders are at $5 million at these levels. $7 million of additional orders, at $41,600 each, is available in the case of more price action.
As mentioned above, $45,000 is still a major resistance in the short term. There are over $20,000,000 worth of asks orders starting at $44,800. There is still a stack of additional asks orders at $46,000, even if Bitcoin prices break through those levels.
The market could be reacting to the situation between Russia and Ukraine, but more importantly for BTC’s price trajectory, it is the impact of this conflict on a potential interest rate hike from the U.S. Federal Reserve (FED). Yahoo Finance reports that Jerome Powell, the Chair of FED, spoke about possible monetary changes.
As the economy continued to be strong in spite of ongoing political tensions, (the FED), is on track for an increase in interest rates this month.
Bitcoin’s Reaction to the Market: What Does It Say?
An anonymous crypto analyst stated that the expectation of an increase in interest rates has turned positive. Thus, why BTC’s price could be experiencing a relief bounce. The market is favoring a 25-bps rate hike based on target rates probabilities.
The analyst believesThis could lead to a gradual upward trend in Bitcoin.
Mr. Market is saying no to a 50bps rate hike in March and yes to a 25bps hike – that means that the risks headed into this month’s Fed meeting are (imo): A) No hike = #BTC to $50k+, B) 50bps hike = Bitcoin to mid 30k, C) 25bps hike = Bitcoin continues to slowly trend higher.
NewsBTC reported that Bitcoin and crypto markets could be facing two options for interest rate increases. First, the FED makes an aggressive move to change its monetary policies. Justin Timmer, Director Global Macro for Fidelity spoke out about this possibility.
The ongoing inflation news will force the Fed to tighten so many times that it eventually “breaks” something, which will in turn force it to pivot much like it did in 2018 after a 20% sell-off in equities.
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According to data above, the second scenario seems more likely and more positive for Bitcoin. In this scenario, the FED takes a more passive stance and allows the market to “tighten” on its own by raising rates with an initial 25 bps this month, topping at 2% in 2023.