A macro mix of bearish triggers has made short-term Bitcoin price action unappealing.
On Thursday’s Wall Street open, Bitcoin (BTC) sank further with stocks as cautious markets awaited further U.S. economic policy clues and battled global concerns.
For stocks and cryptocurrency, macro conditions remain bleak.
BTC/USD fell below $42,000 for the first time in several days at the start of trade, according to data from TradingView.
The Fed and tensions over Ukraine had already created a backdrop for sluggish market performance in crypto and elsewhere, and that trend continued on the day.
With the prospect of a rate hike in the United States growing, all eyes were on James Bullard, president of the St. Louis Federal Reserve, ahead of a statement coming in less than an hour.
Bullard signalled to the mainstream media on Wednesday that he supports raising rates harder and faster to battle inflation.
“We’re missing our inflation objective on our preferred measure… policy is still at rock bottom lows, and asset purchases are still ongoing,” he told CNN, according to Reuters.
“We’ve reached a point where we need to reduce our accommodation.”
Despite numerous rate hikes already being theoretically priced in, any hastening of anti-inflation measures would put downward pressure on soaring markets. Bitcoin, which is already highly connected with stocks, would consequently suffer in lockstep.
In terms of geopolitics, news of bloodshed in the Ukraine-Russia standoff added to the gloom, with contradictory statements from Russia of deescalation and the US government of “imminent” invasion.
Within the first hour of trade, the S&P 500 was down 1.2 percent on the day.
The probability of a $40,000 retest have increased due to lost bids.
In the case of Bitcoin, traders’ jitters about the near-term future were reflected in bids drying up between $40,000 and current spot prices.
According to data from monitoring resource Material Indicators, there was currently very little demand in that area on major exchange Binance, while below the $40,000 barrier, similar “thin air” paved the stage for a probable dip towards $35,000 should a rapid move occur.
“Doesn’t mean that local support can’t hold or that the fractal hasn’t been invalidated yet,” Material Indicators noted in comments on the Binance order book chart.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.
