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As the Federal Reserve starts tapering the stimulus release, the equity and stock market have come under significant pressure. Here’s what market analysts have to say about the Bitcoin price action going ahead.
It was another bloodbath on Satoshi Street on Monday, December 13, as the massive sell-off has eroded more than $150 billion of investors’ wealth. The world’s largest cryptocurrency Bitcoin (BTC) continues with its downward trend plummeting below $47,000 levels ahead of the scheduled Fed meeting.
Analysts note that the recent pullbacks in the equity and crypto markets have been due to the upcoming meeting of the Federal Open Market Committee (FOMC). The Bitcoin price has already corrected more than 40% from its all-time high of $69,000 in November. But this wouldn’t be the end of the pain for BTC investors. Some analysts expect it to dip all the way to $42K before heading for the reversal.
Tapering Actions of Fed Can Put Further Pressure on Bitcoin
The US Central Bank aka the Federal Reserve is all set to start the tapering of the stimulus program started in the Covid-19 pandemic. Fed’s massive money printing over the last year has encouraged many to participate in equities and crypto.
But with the fear of rapidly rising inflation, the tapering will start sooner than expected. A recent report from Delphi Digital notes that Bitcoin (BTC) is facing major headwinds with regulatory matters in the US It said:
“The latest tightening by global policymakers and Fed tapering has already caused markets to reprice. BTC is among one of the worst-performing assets compared to traditional asset classes since the November FOMC meeting, losing nearly 20% of its value over the last month.”
While it has really set a gloomy picture for all Bitcoin investors, some market analysts have been showering hope. Popular crypto analyst CryptoCapo compares the recent price dump with that of September 2021.
These two corrections are very similar.
-Same 3 wave move pattern
-Same bottom formation (3 touches)
-Same funding+premium negative rates
-Same hidden bearish divergence before the last leg down pic.twitter.com/8cVbxo27e1
— il Capo Of $NOIA (@CryptoCapo_) December 13, 2021
Another popular crypto analyst Michaël Van de Poppe said that the Bitcoin price is dropping down after facing rejections at key resistance levels. The analyst further said that Bitcoin is looking for a bullish divergence to be created under $46,500 levels for a possible reversal.
Market is dropping down, as resistances rejected on #Bitcoin.
Looks to me as if we're looking for a bullish divergence to be created beneath the $46.5K area in order to have a reversal possible.
— Michaël van de Poppe (@CryptoMichNL) December 13, 2021
Another market analyst Rekt Capital noted that the recent downside volatility is nothing out of the ordinary for Bitcoin.
#BTC downside wicking below the red Weekly support area has happened many times in the past (orange circles)
— Rekt Capital (@rektcapital) December 13, 2021
Following the Bitcoin correction on Monday, all of the top-ten cryptocurrencies have also corrected anywhere between 5-10%.