Bitcoin’s bullishness is evident in lower time frames. As the U.S Federal Reserve (Fed), announced a 75-basis point increase in interest rates, Bitcoin managed to remain above $20,000 for 2017.
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The financial institution met expectations and Bitcoin and other risk-on asset were able see some relief. The market capitalization of the top crypto is $21,300, with a profit of 3% in 24 hours.
Glassnode Data indicatesBTC owners suffered the largest realized loss in their history, as cryptocurrency fell below its former range (around $28,600-31,500). BTC investors lost over $4.2 billion which, as the on-chain analytic firm claims, “eclipses all major sell-offs in 2021” and 2020.
Long-term BTC owners (LTH) suffered from these losses. LTHs, unlike speculators or short-term holders of BTC, are more resistant to price drops than speculators. The selling pressure got too high and these investors were forced to surrender their position.
However, Long-Term holders suffered major losses of 0.007% per day. This loss is as high as March 2020. It also marks the beginning of the 2021-22 LTH capitulation cycle.
For the moment, downside pressure is being managed. Bitcoin needs to maintain 3 levels if bears re-attack. This will prevent any doom scenario.
It could bring cryptocurrency to 2020 and prompt a bigger capitulation. According to Whalemap, BTC’s price must stay above $19,100, $16,100, and $14,000 to prevent this scenario.
Conversely, the capitalization event described by Glassnode has pushed BTC’s price into its Realized Price zone. As Whalemap added, every time BTC’s price has touched this level, as the chart below shows, the cryptocurrency is able to bounce back to previous highs.
Bitcoin: Will it Seek Bullish Continuation
Trading desk Cumberland believes the global financial markets are “steadily grinding lower”. U.S. Fed announces the first in a string of interest rate increases that could be inefficient in reducing inflation.
The crypto market and Bitcoin could enter a state of “maximum violence”. This is due to a decrease in global liquidity and a reduction in the amount of money that can be used for BTC purchases. These changes have already started to manifest themselves.
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Crypto may suffer greater losses than traditional finance because there are not enough countermeasures to protect it. Cumberland believes that the signs of a market bottom are a series of liquidity losses and additional capitulations in the crypto market.
It’s difficult to predict the scale of the liquidations which have yet to occur, but this type of activity tends to correspond with prices bottoming out. Although no one has sufficient dry powder to combat the Fed, they do have a shorter hiking cycle, and the quicker the Fed reverses.