Cryptocurrency
This is why Bitcoin price has given back all of its intraday gains
On December 14, Bitcoin (BTC) price hit a highest level in one month It experienced a brief revival bullish momentumHowever, the dovish FOMC report and comments from Fed Chair Jerome Powell sent BTC to an intraday low of $17,659.
Stocks and Bitcoin started the day slightly higher but quickly fell back in the FOMC report. So far, the price of bitcoin is still closely correlated with stocks, and most investors are concerned about the impact of the price increase in the future.
Rising interest rates and hawkish talk from Powell affect the price of Bitcoin
While the consumer price index (CPIThe report showed inflation declining at 7.1%, and Powell still wants to reach an overall inflation rate of 2%. Inflation was a critical factor in raising interest rates and the current 0.5% rise was the consensus among FOMC participants. Fed members also agree that rate hikes should continue into 2023.
During the December 14 press conference, Powell stated:
“We may see higher rates for longer to achieve the 2% inflation target.”
This hawkish tone, along with the FOMC survey, shows that interest rates will continue to rise for the foreseeable future.
What will Bitcoin do next?
Bitcoin’s short-lived rally ahead of Powell’s speech correlated with the price action seen across other risky assets. After Powell’s speech and the FOMC, these assets continued to correct, some analysts believe The recent decline as a measure of buying More bitcoin.
Late longs of the current rally could be at risk of liquidation if the BTC price continues to correct. According to derivatives data, open interest on Bitcoin shows that 60.16% of traders are buying.
At the moment, the market is digesting the views expressed by the FOMC and Powell, so the sudden surge in short-term volatility is not abnormal. Investors should watch the next few daily closes to see if the macro trend in Bitcoin changes. The views, ideas and opinions expressed herein are those of the authors alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
Bitcoin investor sentiment is deadlocked amid price faltering in the market. While the digital asset continues to hold the $16,000 level, investors retreat from the market, ensuring that there is no big move either up or down, and as a result, investor sentiment has not moved.
the Encryption of fear and greed It shows that Bitcoin investor sentiment has not moved much in the past month. He finished November with a score of 29 which put him right in the fright zone but since then he has been unable to break out of that trend.
The score in this indicator over the course of December ranged between 26-30 mostly, maintaining an almost straight line trend over the period. So far, the Fear and Greed Index is at a score of 28 which is up one point from last week’s close of 27.
What this trend in the Fear and Greed Index shows is that bitcoin investors are not willing to take any risk. This is why the indicator could not move into the greed zone. On the flip side, selling sentiment has not been as strong as one would expect during a time like this. If investors were to sell more of their bitcoins, it would be obvious given that the index would slide further. Instead, it continues to maintain a roughly consistent point level, which means that the hold sentiment is now dominating the market.
Bitcoin is still finding it difficult to regain the momentum it lost over the past month. This reluctance on the part of investors to do anything with the tokens has led to the price of the digital asset following the same path as sentiment. BTC has now refused to break out from the $16,000 price level. As a result, Bitcoin’s volatility dropped to all-time lows. So it is likely that the last two days of 2022 will follow the same trend. A recovery should not be expected in any way as the momentum will continue to decline as people take a break from the markets to celebrate with family.
Instead, it is important that BTC holds above $16,000 to close the year. Anything below this level would be very bearish and could lead to more declines in the market as the bears take control. But finishing above $16,000 strengthens investors’ resolve to hold on to their coins.
BTC is trading at $16,519 at the time of writing. Its price has decreased by 0.43% in the last 24 hours and 2.01% in the last 7 days.
Featured image by Finbold, chart from TradingView.com
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Bitcoin investors are still in fear
Fear & Greed Index trends in an almost straight line | Source: alternative.me
Will BTC See A Recovery Soon?
BTC price maintains $16,000 level | Source: BTCUSD on TradingView.com
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