The Bitcoin selloff continued on Thursday as news from the U.S. Federal Reserve meeting in December came out hawkish.
The central bank, minutes of meeting show, would dial back and gradually reduce their support for the economy.
Since early 2020, after COVID-19 cases began spiking in the U.S., the government introduced an aggressive system to provide a soft landing for millions of people and companies adversely affected by the resulting healthcare crisis.
The FED is Hawkish
The high rate of vaccinations coupled with the determination of the population to build could have advised the central bank to remain bullish.
Now, following months of support, the U.S. central bank has indicated plans of tapering their bond purchase and would also raise interest rates in 2022. This hawkish state of affairs saw the stock and crypto markets plunge as traders reacted to the news.
Will the success of 2020 and 2021 spill Over?
There are concerns that the volatile nature of cryptocurrencies could especially fast-track drawdown, heaping more pressure on prices. Leading cryptocurrencies, mainly Bitcoin, benefited from the loose monetary policy. As a result, from 2020, its valuation rapidly expanded, rising over 3X to peak at over $68k in 2021. Whether this would be replicated in the days to come mainly depends on adoption.
There is confidence following the approval of the first Bitcoin Futures ETF, allowing deep-pocketed institutions to gain crypto exposure in a regulated manner. At the same time, the popularity of Bitcoin and crypto as viable asset classes would serve to steady prices in the long haul.
Bitcoin Price Analysis
The BTC price is printing lower lows, reading from the performance in the daily chart.
Even though traders are confident about the coin’s prospects, the present candlestick arrangement favors sellers. For instance, BTC is now down roughly 38 percent from November 2021 peaks.
Furthermore, the close below $45.6k was a break-out pattern, confirming sellers. With BTC bear candlesticks banding along the lower BB, aggressive traders may find entries to unload the pullbacks.
The immediate target levels is at December 4 lows at $40k and later, $38k—flashing with the 78.6 percent Fibonacci retracement level of the H2 2021 trade range.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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