The market’s premier cryptocurrency, Bitcoin, continues to trade in a bear market as the US Dollar maintains strong positive traction. Bitcoin has fallen nearly 6% in the past 24 hours and more than 8% in the previous seven days.
The Fed’s bullish policy and the hike in the fed funds rate trigger risk aversion
The bearish trend in the price of Bitcoin could be attributed to the performance of the US stock market, affected by fears that the Federal Reserve (FED) continues to raise interest rates. This makes investors less risk averse, causing their funds to withdraw from riskier assets such as stocks and bitcoin. The NASDAQ 100 and S&P 500 both fell due to the strengthening dollar, which puts downward pressure on Bitcoin.
Separately, Russia’s shutdown of the Nord Stream 1 gas pipeline, which cut off the flow of gas to Europe, is causing significant market concern and contributing to the lower Bitcoin price. Rising bond yields are also keeping Bitcoin price under pressure. If these trends continue, Bitcoin (BTC) price growth could be markedly bearish over the coming year.
Bond yields rise
Stronger-than-expected US manufacturing data heightened concerns about the need for central banks to raise interest rates quickly to contain inflation.
In an unprecedented move since mid-June, US 10-year bond yields rose 6.1 basis points to 3.25%. As a result, investors prefer to invest in risk-free assets, which adds downward pressure on Bitcoin price.
A stronger dollar comes into play
The US dollar turned green and hit a new 20-year high. The reason could be attributed to investors’ expectations of the Fed taking an aggressive stance, which helped the value of 10-year US Treasuries.
The price of Bitcoin, which has a strong inverse relationship with tech stocks and the tech-based NASDAQ, also fell. According to a Bloomberg article, the Fed’s aggressive measures could become much more forceful. Fed Chairman, Jerome Powellseems to follow the traces of fire Paul Volcker. Volcker’s hawkish stance on inflation is most likely what pushed the US economy into the doldrums.
If the FED maintains its quantitative tightening, the US dollar could gain traction and reach new highs. In his speech in Jackson Hole, Powell reiterated his desire to strengthen the dollar to fight inflation.
Richard Heart, a major crypto influencer, estimates that Bitcoin will fall to $11,000 before rising again. Investors’ attention remains focused on the publication of CPI (consumer price index) data due on September 13th.
Can BTC test 17,600?
The main crypto pair BTC/USD recorded a decline and fell from $20,000 to $18,750. Over the past 24 hours, BTC/USD broke below the $19,053 support level. The closing of the bearish candle below the $19,053 level could potentially lead to further bearish trends in Bitcoin.
As we can see, the BTC/USD pair has deviated from the symmetrical triangle pattern on the lower side, signaling a strong selling bias among investors. On the downside, immediate support for the BTC/USD pair prevails at the $17,685 level, and a breakout of this level could open more room for selling up to the $16,450 level.
Can BTC win back $20,000?
It will likely be difficult for BTC to regain $20,000 unless it breaks above the $19,500 resistance level. However, a surge in demand may lead to a break above $19,500, and the price of BTC may surge towards the resistance levels of $21,900 or $22,425.
Follow our affiliate links:
- To buy cryptocurrencies in the SEPA Zone, Europe and French citizensvisit Coinhouse
- To buy cryptocurrency in Canadavisit Bitbuy
- To generate interest with your bitcoinsgo to the BlockFi website
- To secure or store your cryptocurrenciesget Ledger or Trezor wallets
- To trade your cryptos anonymouslyinstall the NordVPN app
To invest in cryptocurrency mining or masternodes:
To accumulate coins while playing:
- In poker on the CoinPoker gaming platform
- To a global fantasy football on the Sorare platform
Stay informed with our free weekly newsletter and to our social networks: