- Bitcoin and equities could plummet post the Federal Open Market Committee’s decision on Wednesday.
- The 200-day Exponential Moving Average is key to assessing Bitcoin’s weakness; analysts consider the current trend a trap setup.
- Bitcoin price could break out of its downtrend and rebound in May or June 2022 if a key indicator crosses its sell point.
Analysts predict a deterioration in Bitcoin price as the FOMC’s decision on a rate hike looms overhead. Bitcoin price could re-test $28,000 if the asset fails to rebound and break out of the bearish trend.
Bitcoin price could rebound if this indicator turns bullish
The Federal Open Market Committee’s meeting on Wednesday could result in an interest rate hike by 50 basis points. Typically, an increase in interest rates negatively impacts equities and tech stocks as investors tread cautiously, pulling capital out of volatile markets.
Bitcoin’s relatively high correlation with tech stocks means BTC too could face selling pressure as investors pull out of the asset. Analysts believe continued weakness in the crypto market could further deteriorate sentiment among investors, and Bitcoin price could re-test $28,000.
Crypto analysts at Rekt Capital believe the 200-day exponential moving average (EMA) is a reliable indicator to assess the weakness in Bitcoin’s price trend. Analysts argued that the Bitcoin price has failed to hold above the 200-day EMA since mid-2021. Whenever Bitcoin price breaks above the level, it loses its support and treads lower.
If Bitcoin price can sustain above the 200-day EMA without plummeting lower, it is a bullish sign that points to BTC recovery.
Black 200-day EMA in Bitcoin chart
The Taker Buy Sell Ratio is another indicator that has played a vital role in predicting the Bitcoin trend reversal. Bitcoin price has reached the upper part of the sell point. The indicator works counter-intuitively according to analysts, with a retouch of the sell point actually heralding a recovery in BTC price.
Taker Buy Sell Ratio - Bitcoin
Dan Lim, for example, a leading crypto analyst and trader, believes Bitcoin price could rebound in May or June 2022, based on previous instances of BTC trend reversal after touching the sell point.
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