Bitcoin price analysis indicates Bitcoin is currently trading at $16,538 after a minor decline of 0.48% in the past 24 hours. The cryptocurrency has failed to break out of the $17,000 resistance level and is on track for a significant correction in the coming weeks. Bitcoin has sought support at $16,500, but this may not be enough to keep the price from dropping.
Market analysts believe that a sell-off could take place within the next few weeks, as Bitcoin’s bullish momentum has weakened over the past few days. For instance,according to CryptoBusy market analyst based in Twitter,Bitcoin might be headed for a sell off due to a lack of buying pressure and the failure to break through $17,000.
Furthermore, technical indicators such as the Relative Strength Index (RSI) have dropped below 50 which indicates that sellers are beginning to enter the market. If Bitcoin’s price fails to rebound soon, it could experience a sharp decline in the near-term.
Further technical indications shows BTC is trading below the 200 and 50 moving averages which suggests further downside is to be expected in the near-term. Bitcoin’s price action remains bearish on all timeframes,with the Fibonacci Retracement level of 78.6% becoming a solid resistance level to break.
Bitcoin Hit by the Tumultuous Global Stock Market
This Tuesday, the crypto market experienced a wave of unpredictability as Bitcoin entered a low-volatility channel and its price plummeted further. Analysts believe that with traders looking for safety from the ever-changing markets, Bitcoin is unable to keep up.
This doubt in BTC’s performance was reinforced by US Housing Price Index figures demonstrating declining real estate prices all over the nation along with an astonishingly high bidding rate on 2 year bonds released by US Treasury – greater than what was recorded back in 2017.
As we approach the end of this year, investors are seeking out bonds for safety. This has caused a spike in bond market activity which resulted in CME Fed Fund Futures’ expected rate cut for 2023 to vanish, and hikes predicted throughout that upcoming year instead.
On Tuesday, the US equity market saw a sharp decline that further drove Bitcoin’s value down. It is worth noting that every time BTC dropped in value, Nasdaq was the first to follow suit with S&P 500 and Dow Jones index subsequently joining in – indicating a shift between sectors by traders moving away from technology towards other markets.
Investors have been drawn to the rising interest rates of US Treasury bonds, opting for either cash or these debt securities. After all, with a guaranteed promise from the United States government to never default on its debts, investing in Treasury bonds provides an unmatched level of security and assurance that money is well-spent.
By investing in BTC, traders benefit from the stability of the US Treasury and can expect an annual return between 1.5-4% or 5%. However, with upcoming Federal Reserve rate hikes expected to take place in 2023, a capital redeployment is predicted away from Bitcoin’s price performance towards bonds. This could potentially drive BTC’s value up to $16 020 before further decreases arise over ensuing days and weeks.
Bitcoin is likely to end 2022 in a sell-off due to the potential influx of capital heading towards US Treasury bonds, as well as more conservative investors seeking safety. Although traders might be able to take advantage of these opportunities in the near-term.At this moment in time, Bitcoin appears to be on track for a significant correction in the coming weeks.
