For the bulls, not all is going according to plan, warnings say, as support at $44,000 hangs in the balance.
Bitcoin (BTC) continued its slide at the open on Wall Street on Wednesday with its first test of $44,000 since early April.
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair hit a 12-day low of $43,801 on Bitstamp, down more than 7% from the month’s high.
The move defied positive triggers in the form of new MicroStrategy and Terra acquisitions, but analysts were instead eyeing macroeconomic factors as the next potential BTC price driver.
BTC’s Price Hits Two-week Lows
Jeroen Blokland, portfolio manager at asset manager Robeco, said that the 10-year US Treasury yield, trending higher throughout the year, should reverse direction and give risky assets a breather. “We haven’t gotten to that point yet,” he warned that day, though.
On Twitter, Holger Zschaepitz (@Schuldensuehner), market commentator, posted that, “US 10y yields jump to 2.56% thx largely to Brainard’s hawkish remarks, which raised fears ahead of FOMC minutes on Wed.”
In a possible counter move, the US Federal Reserve has revealed that an “aggressive” balance sheet reduction is due to begin in May, marking the end of the “easy money” policy that many had feared would put pressure on demand for risk assets.
“It is of the utmost importance to bring inflation down,” future Fed Vice Chair Lael Brainard said in remarks at a conference this week, quoted by the Financial Times, among other sources.
“Consequently, the committee will continue to methodically tighten monetary policy through a series of interest rate hikes and beginning to shrink the balance sheet at a rapid pace beginning with our May meeting,” Brainard pointed out.
Inflation continued to disrupt sentiment beyond the US, with Eurozone annual producer price inflation making the biggest jump on record in February – over 31%. On the eve of war between Russia and Ukraine, future readings are likely to be even higher.
Current Spot Price Zone Crucial to Hold
In a worrying environment, price watchers were keen to take a breather, calling for $44,000 to remain as a bullish base.
Private fund manager and CryptoQuant contributor, known by his popular Twitter account Gaah, argued that $44,400 was the level to defend to avoid a tailspin that could take the market to $37,000.
“Something is off and the next few days will show what is happening,” Crypto trader Ed added, sounding more concerned. A failure to hold $45,000, something that came later, would thus pave the way for the $43,000 low, he said in his latest YouTube update.
Predictions about Bitcoin Prices in 2022
Bitcoin price history shows that after starting 2021 with a value of $28,994.01, the cryptocurrency rose to reach an all-time high of $68,789.63 on November 10. It then fell rapidly after that, ending the year at $46,306.45.
The Bitcoin price trend has continued downward this year, falling to a low of $33,184.06 on January 24 and concluding on February 20 at $38,431.38, a fall of 17% to date.
According to an article by Mads Eberhardt, a cryptocurrency analyst at Danish bank Saxo, “It appears that the cryptocurrency market has, to a large extent, been driven by the same factors as equity markets: inflation concerns and stress between Russia and Ukraine. Furthermore, following the transformation of risk sentiment in equities, accentuated by the slide in tech stocks this year, the cryptocurrency market has taken a hit as more traditional stock traders may also have cryptocurrencies in their portfolios, thereby scaling their risk proportionally between stocks and cryptocurrencies.”
By Audy Castaneda
