Bitcoin price drops to $43.7K after Fed minutes re-confirm plans to hike rates

Bitcoin
(BTC)
and
the
wider
cryptocurrency
market
fell
under
as
equities
markets
pulled
back
at
the
closing
bell
after
minutes
from
the
Federal
Reserve’s
December
FOMC
meeting
showed
that
the
regulator
is
committed
to
decreasing
its
balance
sheet
and
increasing
interest
rates
in
2022.

As
stock
markets
corrected,
BTC
price
followed
suit
by
dropping
below
$44,000,
setting
off
a
cascade
of
liquidations
that
reached
$222
million
in
less
than
an
hour. 


Total
liquidations.
Source:
Coinglass

Data
from

Cointelegraph
Markets
Pro

and

TradingView

shows
that
after
oscillating
around
support
at
$46,000
for
the
past
couple
of
days,
Bitcoin
was
hit
with
a
wave
of
selling
that
pulled
the
price
to
an
intraday
low
of
$43,717.


BTC/USDT
4-hour
chart.
Source:
TradingView

Based
on
the
current
situation,
it
is
widely
expected
that
the
Fed
will
begin

raising

its
benchmark
interest
rate
in
March,
“which
would
mean
that
balance
sheet
reduction
could
start
before
summer.”

Here’s
a
look
at
what
crypto
analysts
are
saying
about
the
latest
Bitcoin
price
drop
in
BTC
and
what
could
be
in
store
in
the
weeks
ahead
as
the
easy
money
policies
of
the
Fed
come
to
an
end
and
interest
rates
start
to
rise.

Capitulation
looms
below
$44,000

A
foreshadowing
of
Jan.
5’s
pullback
was
offered
by
crypto
analyst
and
pseudonymous
Twitter
user
Rekt
Capital
who

posted

the
following
chart
highlighting
the
“many
similarities
between
this
BTC
range
and
May
2021.”


BTC/USD
1-week
chart.
Source:
Twitter

Rekt
Capital
said,

“Both
saw
BTC
consolidate
inside
two
Bull
Market
EMAs
(i.e.,
green
21-week
&
blue
50-week
EMA).
If
BTC
is
to
repeat
history,
a
capitulation
event
could
take
place
where
BTC
briefly
deviates
below
the
blue
50
EMA.”

BTC
needs
to
reclaim
$46,000

A
more
in-depth
look
at
the
price
action
from
May
was
offered
by
analyst
and
Cointelegraph
contributor
Michaël
van
de
Poppe,
who

posted

the
following
chart
detailing
how
BTC
performed
during
the
last
sharp
market
pullback.


BTC/USDT
4-hour
chart.
Source:
Twitter

van
de
Poppe
said,

“And
the
scenario
of
the
drop
beneath
$46K
is
taking
place
on
Bitcoin
here.
The
question
becomes
will
we
be
hanging
here,
taking
the
liquidity
&
breaking
back
above
$46K?
In
that
case,
the
bottom
is
in.”

Should
the
price
not
break
back
above
$46,000,
the
market
could
be
in
for
an
extended
bear
period
that
has
the
potential
to
see
BTC
retrace
to
the
low
$30,000
range.



Related:




President
Biden
is
considering
economists
to
fill
Fed
seats
as
leadership
nominations
move
to
Senate:
Report

The
scenario
currently
facing
the
market
was
succinctly
addressed
in
the
following
chart
posted
by
options
trader
and
pseudonymous
Twitter
user
Nunya
Bizniz.


BTC
price
vs.
RSI.
Source:
Twitter

Nunya
Bizniz
said,

“BTC
monthly:
Drops
below
the
current
RSI
level
have
been
ugly.
This
time?”

The
overall
cryptocurrency
market
cap
now
stands
at
$2.123
trillion
and
Bitcoin’s
dominance
rate
is
39.4%.

The
views
and
opinions
expressed
here
are
solely
those
of
the
author
and
do
not
necessarily
reflect
the
views
of
Cointelegraph.com.
Every
investment
and
trading
move
involves
risk,
you
should
conduct
your
own
research
when
making
a
decision.

read original article here