Bitcoin testing 5-month lows amidst hawkish Fed
The world’s oldest cryptocurrency has had a rough week, trading down nearly 13% from its New Year’s day high.
The biggest catalyst for the selloff was Wednesday’s FOMC minutes, which showed that the US central bank was closer than anticipated to completing its taper, raising interest rates, and even drawing down its bloated balance sheet. In response to the FOMC minutes, the market is now pricing in the potential for as many as four interest rate increases this year, with liftoff in March now more than 75% priced in according to the CME’s FedWatch tool.
As of writing, Bitcoin is testing a key zone of previous-resistance-turned-support in the 41K-42K area. This zone has seen repeated highs and lows form over the last seven months, and a break below it (especially on the first real test in months with the RSI indicator in oversold territory) would signal the potential for more downside to come, with little in the way of support until all the way down near 30K.
Meanwhile, the market may still be skeptical of any bounce off this zone unless or until the cryptocurrency regains support from December in the
46K area.
The biggest catalyst for the selloff was Wednesday’s FOMC minutes, which showed that the US central bank was closer than anticipated to completing its taper, raising interest rates, and even drawing down its bloated balance sheet. In response to the FOMC minutes, the market is now pricing in the potential for as many as four interest rate increases this year, with liftoff in March now more than 75% priced in according to the CME’s FedWatch tool.
As of writing, Bitcoin is testing a key zone of previous-resistance-turned-support in the 41K-42K area. This zone has seen repeated highs and lows form over the last seven months, and a break below it (especially on the first real test in months with the RSI indicator in oversold territory) would signal the potential for more downside to come, with little in the way of support until all the way down near 30K.
Meanwhile, the market may still be skeptical of any bounce off this zone unless or until the cryptocurrency regains support from December in the
46K area.
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