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Investing.com – Bitcoin is having a rough time this weekend, with the cryptocurrency falling to a low of $27,263 on Sunday afternoon.
Bitcoin thus shows a drop of 3.41% over 24 hours and 7.5% over one week at the time of writing this article.
Recall that the forward started to decline last Friday, after the US CPI once again exceeded expectations which confirmed that the Fed will continue to hike rates aggressively, a positive factor for the Dollar and negative for Bitcoin.
Bitcoin then lost $30,000, and confirmed its fall on Saturday, falling below $29,000, before blowing up a new psychological threshold, $28,000, this Sunday.
No new crypto-specific news appears to be behind Bitcoin’s accelerating decline over the weekend, and it should be remembered that reduced liquidity in the crypto market over the weekend tends to accentuate moves.
However, we note some information from China that is not conducive to risk appetite in general. Beijing has indeed reintroduced some minor restrictions to control a covid-19 epidemic. Earlier, a city government spokesperson had said that “the recent outbreak … is highly explosive in nature and large in scale.”
Important thresholds for Bitcoin in the short term
Either way, from a chart perspective, the next potential support is the $27,000 threshold, ahead of the 2022 low at $26,600. Then, few credible supports can be spotted before the major psychological threshold of $20,000.
Finally, it will be recalled that after the ECB meeting last Wednesday and after the US CPI on Friday, the next major event for Bitcoin, and the financial markets in general, will be the Fed meeting on Thursday, for which an increase of rate of 0.5% is widely anticipated.
However, given last Friday’s nasty CPI surprise, more and more voices are talking about the possibility of an even bigger rate hike of 0.75%. If this materialized, it would be a strong hawkish surprise that would no doubt send Bitcoin down very sharply.