- Bitcoin price is taking a step back with over 3% loss in two trading days.
- BTC tests support at a key level that could break in the near term but does not mean the uptrend is finished.
- With the Golden Cross nearly in full effect, expect a strong rally once the Fed confirms that inflation will still come down in the coming weeks.
Bitcoin (BTC) price worries traders as the earnings season sees profit warnings being issued, labor costs rising, margins thinning, and goods still very pricey. Second-tier data confirms that inflation does not seem to be going away that easily. Traders will want to hear from the US Federal Reserve to be reassured that enough has been done so far and that inflation will come down as the delayed impact of rate hikes is still set to kick in.
Bitcoin price proof that central bank policy always kicks in with delayed effect
Bitcoin price is tanking for a second consecutive day in a row as support is being tested at $23,878 in early Wednesday trading. The downturn comes as traders are getting worried as interest rates are spiking across the board, and second-tier data suggests that inflation is not going away that easily. With Bitcoin price up 45% for the year, it is unsurprising that the uptrend is taking a small pause as the effect of the central bank rate hikes is still yet to be felt.
BTC traders must not forget that although inflation looks to be sticky, several economic and growth indicators show signs of weakness. More and more companies are cutting jobs surgically where needed to keep the best employees within the firm, and housing prices are coming down while empty vacancies in New York apartments are rising. Expect Bitcoin price to either find support at $23,878 or $21,969 before starting its uptrend again. Finally, expect to see the 200-day Simple Moving Average (SMA) rise and fully materialize that Golden Cross with a $30,000 price target.
BTC/USD daily chart
The biggest risk for a slip below $20,000 comes in case the economic and sentiment data should point to a toxic mix of high inflation, bullish sentiment in both consumers and businesses, and housing prices on the rise again. That would mean that the Fed needs to hike even more as the inflation is still being fed with plenty of people at work and higher wages. Multiple rate hikes beyond the summer could see Bitcoin price tank toward $19,036.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin holds the $62,000 level as US spot Bitcoin ETFs registered inflows
Bitcoin sees a 3% price decline on Tuesday, trading around the $63,000 level at the time of writing. On-chain data shows a liquidation of $71.02 million in short positions and a rise in open interest. Additionally, US spot Bitcoin ETFs recorded $300.90 million in inflows on Monday.
Ripple supports attorney John Deaton with $1 million donation, XRP tests $0.57
Ripple (XRP), the cross-border payment remittance firm, has pledged $1 million to the Political Action Committee (PAC) that supports Attorney John Deaton’s campaign against Senator Elizabeth Warren in the state of Massachusetts.
Maker rallies toward $4,000 target even as whales take profits in MKR
Maker (MKR) extended gains by nearly 33% in the past seven days, as seen on Binance. On-chain data shows that even as Maker holders take profits on their MKR holdings, the governance token sustains above key support.
Dogwifhat price sets for 12% rally
Dogwifhat price broke above a descending trendline on Monday, suggesting a potential bullish move. At the time of writing, it is slightly up 1% at $2.171 on Tuesday. Additionally, WIF's price action reveals the formation of a double bottom pattern, signaling a possible trend reversal on the horizon.
Bitcoin: Investors wonder if BTC troubles are behind
Bitcoin (BTC) stabilized around the $57,000 mark this week, while the German Government persists in transferring Bitcoin to exchanges. Concurrently, US spot Bitcoin ETFs have recorded inflows.