Bitcoin capped below $40,000 but Fed could infuse downside pressure – Cryptocurrency News



Bitcoin and most altcoins have struggled during the first months of 2022 as central banks’ monetary tightening has been squeezing most assets across the board. After a vast sell-off in April, major cryptocurrencies have adopted a rangebound pattern as investors eagerly await the Fed’s decision on benchmark interest rates on Wednesday, as well as its forward guidance regarding its balance sheet reduction. Therefore, in a period when Bitcoin’s correlation with the US stock indices remains near its all-time-high levels, will the mounting macro headwinds drive crypto markets lower?

FOMC decision in the spotlight

Later today, investors will be keeping a close eye on the Fed’s interest rate decision as it could prove catalytic for most asset classes. Specifically, the Fed is expected to hike rates by 50 basis points, which would be the first-half point rise in 22 years in its effort to cool down the persistently high inflation. However, this is already baked in by the markets and attention will probably lie on Jerome Powell’s press conference.

If the Fed Chair appears to be more hawkish than expected, signaling that the Bank will proceed with an aggressive rate hike timeline and a prompt balance sheet reduction, despite the increasing fears of a slowdown in economic growth and a potential recession, this could cause a severe capitulation in risky assets. Consequently, this turbulence would spill over to the crypto markets as investors would steer away from volatile assets.

But more than that, the anticipation of higher interest rates has applied upward pressures on bond yields, turning the 10-year US real yield positive for the first time since March 2020. This development combined with the increasing macro risks might fuel up demand for bonds, which are finally acting as an attractive alternative to risky assets.

Broader uncertainty torments risky assets

Monetary tightening is not the only risk for speculative assets as we head deeper into 2022. On Wednesday, the European Union proposed to ban Russian crude oil over the next six months and refined fuels by the end of the year, increasing the probability of a recession in Europe. Moreover, the lockdowns in China seem to be further deteriorating supply disruptions, keeping inflationary pressures high.

In recent months, the average person has seen his energy bills going through the roof, alongside food prices and rents. Therefore, considering the continuously increasing cost of living and the broader economic uncertainty as well as the withdrawal of excess liquidity, investors might prefer to play defence, curtailing their exposure.

First crypto loan

On the bright side, there are some signs of growing cryptocurrency adoption by big players in the financial industry. For instance, Coinbase acquired the first loan ever, which entails Bitcoin as collateral, from Goldman Sachs. It is obvious that Coinbase’s agreement with Goldman is the first step towards the recognition of crypto as a real asset, narrowing the gap between the fiat and crypto economies.

Central African Republic adopts Bitcoin as official currency

In other news, the Central African Republic has adopted Bitcoin as an official currency, making it the first country in Africa and the second in the world after El Salvador to do so. The government supports that this action will improve the conditions of Central African citizens as it could create intergenerational wealth for people that never really had access to financial instruments.

This development could open the door for many emerging countries to start adopting Bitcoin as a tender currency, which might eventually put pressure on policymakers to create a universally accepted regulatory framework.

 Will Bitcoin’s price make it or break it?

Taking a technical look at Bitcoin’s price, the largest cryptocurrency by market capitalization is experiencing a consolidation phase after its short-term decline failed to push below the $37,500 mark. Nevertheless, we can observe that a descending triangle pattern has formed and the outcome of today’s FOMC meeting could declare the direction of the next price break.

Should the Fed tone down its hawkish rhetoric, the price could post an upside breakout, slicing through the $40,000 barrier and targeting the 50-day simple moving average, currently at $42,000.

On the flipside, signals of a faster tightening cycle may send the price to test the recent low of 37,500 before the spotlight turns to the 2022 low of $32,950.

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.