The Fed’s recent remarks suggesting possible rate hikes as soon as March continues to impact the cryptocurrency market. The Crypto Fear & Greed index has fallen to the 15 on January 7th, an “extreme fear” zone, and recovered 3 points today. Some traders speculate that the next long-term bear market is about to unfold.
Data shows current Bitcoin price has dropped through U.S. $42,000. By completion of this article, Bitcoin price is at U.S. $41,595, getting close to its lowest point since September 27th, 2021.
According to Mike Novogratz, a Bitcoin advocate and CEO of Galaxy Digital Holdings, the latest downtrend is accompanied by low trading volumes, which indicates that “tremendous amount of institutional demand on the sidelines.”
So, when is the right time to buy? Novogratz says he’d wait a bit more time before buying cryptocurrencies, supplemented that the market will tumble within the next few weeks.
“$38,000, $40,000 feels like where we should bottom.” Novogratz says.
Cryptocurrency analyst named Rekt Capital put forward his views on recent Bitcoin price trends. He posted the chart above to compare the current market conditions with the last time when Bitcoin price fell below the 50-day exponential moving average (EMA).
“BTC has deviated below the blue 50 EMA”, Rekt Capital says, “BTC is trying to form one (Higher Low) now (green)”
“In May 2021, BTC also formed a Higher Low (orange) upon deviating below the 50 EMA BTC held the HL initially but wicking below it was common also” Rekt Capital supplemented.
Judging from the analysis above, Rekt Capital believes Bitcoin price can drop to the level of around U.S. $40,000.
Private investor and host of the popular podcast “The Wolf Of All Streets” Scott Melker posted this image, showing that Bitcoin is being traded between 0.65 and 0.618 Fibonacci retracement level.
Melker refers this range to “golden pocket” and commented “It is considered the most viable place to long or short an asset and look for a reversal. Price is currently in the golden pocket of the move from $28,600 to $69,000.”
The current cryptocurrency market value is at 2.077 trillion USD, and Bitcoin accounts for 39.5% of the entire market value.
Sources:
https://medium.com/@business_40259/fed-to-increase-interest-rate-bitcoin-crashes-again-6820c95bff33
https://twitter.com/scottmelker/status/1479147217164582916
https://twitter.com/rektcapital/status/1479076198147837952
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