What’s Next For Bitcoin As Prices Encounter Difficulty Reclaiming $43,000?
Recently, bitcoin prices have struggled, often dipping below the $43,000 mark and then failing to post substantial gains.
Around 9:20 a.m. EDT, the world’s most popular crypto asset retreated to $42,777.20, CoinDesk data show, Saturday.
The majority of cryptocurrencies traded lower early Saturday. Global crypto market market capitalization fell nearly 3% to $1.15 trillion in the last 24 hours, while total crypto market volume was up 9.3 percent to $89.50 billion.
Bitcoin Short Stay At Near $44K
Bitcoin was able to inch back slightly shortly thereafter, reaching $43,962.01 at approximately 10 a.m. EDT. Following this comeback, it retreated again, falling to around $42,840 at 1:30 p.m.
On the other hand, the overall volume of stablecoins was $74.34 billion, or 83.06% of the total 24-hour volume of the cryptocurrency market.
Bitcoin was recently trading at an average price of around $43,500, roughly where it was 24 hours ago and well below the $47,000 barrier it crossed just a few days earlier, as investors continued to weigh in on the Federal Reserve’s new hawkish zeal and the ongoing twist of economic developments sparked by Russia’s attack on Ukraine.
BTC total market cap at $805.46 billion on the weekend chart | Source: TradingView.com
Unease Over Fed’s Monetary Policy Tightening
According to an email from Oanda Senior Market Analyst Americas Edward Moya:
“Bitcoin is unsure of its direction as Wall Street gets concerned about the central bank’s aggressiveness in tightening monetary policy.”
Following these recent price swings, various experts expressed their predictions for the cryptocurrency’s future direction.
Ben McMillan, chief information officer at IDX Digital Assets, weighed in, indicating critical levels of support and opposition.
“$43k is a critical support level in the near term as bitcoin attempts to build on its recent relative strength,” he noted.
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Cryptocurrency prices deviated somewhat from the performance of the main equities markets, which were marginally positive. The Nasdaq, which is heavily weighted toward the tech sector, gained less than a tenth of a percentage point.
The US central bank has communicated strongly over the last week, both collectively and through individual governors, that it will step up efforts to contain inflation, which has hit about 8%, a four-decade high.
The correlation coefficient between Bitcoin and US equities has increased in the last 90 days as investors have become more risk averse in response to the Federal Reserve’s withdrawal of the pandemic-era intervention that is attributed with catalyzing the ascent of cryptocurrency.
Featured image from Research Affiliates, chart from TradingView.com