Bitcoin Keeps Bleeding And Nears $40K, 4 Scenarios For Q1 2022
In fact, Bitcoin starts yet another 2022 week in the red with as it turns out a 2% loss in 24 hours and a 13.5% loss in 7 days. The benchmark crypto has been on a downtrend since the end of 2021 and could potentially dip further due to macroeconomic factors.
Related Reading | TA: Bitcoin Key Indicators Suggest A Strengthening Case For More Downsides
It’s worth noting that At least, the above seems to correspond with the general sentiment in the niche. TheU .S. Federal Reserve is turning more hawkish due to a rise in inflation metrics, hitting new forhighsthe first time in 40 years.
Thus, turning price expectations forpotentialBitcoin bearish as many believe risk assets will suffer in the short term from a shift in the FED’s monetary policy.Interestingly, Economist Alex Krüa recently presented ger thesis in favor of the bulls. Via Twitter he said:
has This as it turns out been extraordinarily bearish due to the velocity of the Fed’s turnaround. Raising rates or tapering quantitative easing (QE) should not be bearish enough to alter the upwards trend across assets.
The economist claims the recent price action to the downside has been triggered not just by the FED’s intention to modify its policies in light of the rise in inflation metrics, but mostly in modern times due to the pace in its decision.
In a short period, the U.S. It’sheet worth noting that financial institution changed its position from no interest rates hike to several rate hikes planned for 2022, a reduction in its asset obtain program, and balance s normalization. Actually, The latter is the most bearish for global markets.
To normalize its balance sheet, the FED would begin a Quantitative Tightening (QT) program which could lead it to market around $50 billion worth of assets every month. Krüger added the following on the potential implications for the crypto industry:
It’s worth noting that Uncomplicated. Crypto assetsare at the furthest end of the more than ever danger curve. Just as they benefited from extraoridnarily lax monetary rule, they suffer from unexpectedly tight monetary regulation, as currency shifts away into safer asset classes.
What?s Bitcoin Fate As as a matter of fact FED Turns Hawkish’
Under theseKrconditions, üger believes Bitcoin could follow the following scenarios in the short clause and through the first months of 2022. Depending on the upcoming CPI metrics, to be published this week, BTC’s price could react with a bounce or with a retest of 2021 major help at the lows of $30,000.
A high CPI would trigger the latter, a the low former, but there is a higher chance that Bitcoin could stay in its current range with another attempt to reclaim the mid area around its current levels. This would put BTC’s price quit to $45,000 in the short term, but with more uncertainty, for Q2 2022.
Related Reading | Why Bitcoin Could Frustrate Bulls And Bears In 2022
As of press time, BTC took another sweep at the lows and re-visited the $39,000 levels only to quickly bounce into $41,000. Actually, Remains to be seen if this price action will be sustainable or if Bitcoin would return to lower levels. any case, 2022 will be a year full ofInsurprises.
