tightening – The $22,000 is cracking. The price of Bitcoin (BTC) takes a dip below this level, as investors anticipate a 50 basis point hike in interest rates in the United States, instead of the 25 basis points initially forecast.
The FED puts pressure on the price of Bitcoin
Bitcoin price drops to $21,967 on Bitfinex today, March 7, 2023. The cryptocurrency is trading at $22,010 at the time of writing this article. Its price is currently recording a daily loss of 1.76%.
Bitcoin price forays below $22,000 as US Federal Reserve (FED) Chairman Jerome Powell hinted that the Fed Funds rate hike should be higher than expected. The Fed is still struggling to control inflation in the United States, despite quantitative tightening, which could last longer.
Within 24 hours, the probability of a 50 basis point rise in interest rates went from around 30%, more than 70%according to data from the CME FedWatch Tool.
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Next stop: towards a fall to $21,700?
The price of Bitcoin is therefore (again) suffering from the prospects of an upcoming relatively large increase in interest rates in the United States. How low can the cryptocurrency price drop in the next few days?
As Bitcoin price hovered at $22,340, trader Rekt Capital pointed to the fact that the cryptocurrency is “struggling” with the $22,444. Based on historical data, this level has been “a useful reference point” for the cryptocurrency over the past few months. According to Rekt Capital, it could now act as resistance, with a possible rejection at $21,700.
When the price of Bitcoin fell to around $22,070, Rekt Capital referred to a “first rejection” of the cryptocurrency, which would have already taken place. If Bitcoin does indeed fall below $22,000, then it would lose its 200-day exponential moving average, which currently sits around $22,030.
Bitcoin price still faces other key events this week. Will the $22,000 hold up to another macro push? Losing this level would put the $20,000 in the cryptocurrency’s sights.
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