By
Steve Muchoki
May 6th, 2024
Following the Jackson Hole meeting, strong liquidations took place in the crypto market. Bitcoin and altcoins have seen a greater fall last weekend.
Bitcoin and the broader cryptocurrency market came under severe selling pressure over the last weekend, this happened following the Fed’s Jackson Hole Meeting last Friday wherein chairman Jerome Powell said that fighting inflation is their primary objective.
Powell further hinted toward aggressive quantitative tightening measures going ahead. As of press time, being under the influence of the Jackson Hole Meeting-related news, Bitcoin (BTC) is trading at $19,843 while losing its crucial support of $20,000.
As per the data on Google Trends, the search interest for Bitcoin has been on a considerable decline since mid-June 2022. In fact, the search interest for BTC has dropped to a 12-month low as of now. In mid-June 2022, the search interest for BTC touched a one-year high. However, since then, the BTC search interest has dropped more than 70% as of date.
In the past, notable changes in Bitcoin search activity have also reflected in its price. One such example is that of December 2017 when BTC search activity and price both peaked.
Impact of Global Macros on Bitcoin
As the Fed undertakes the path of interest rate hikes to combat inflation, risk-ON assets such as Bitcoin and crypto have come under pressure. Along with Bitcoin, the broader crypto market has come under selling pressure.
As of Monday, August 29, the MVIS CryptoCompare Digital Assets 100 Index dropped as much as 2.5%. Commenting on the development, Cici Lu, chief executive officer at consulting firm Venn Link Partners said:
“Money is flowing out of risky assets. Crypto followed the sharp adjustment of the U.S. stock market. Markets didn’t like what he had to say and Bitcoin is resuming as a high-beta asset.”
The fall of BTC under $20,000 hints at greater weakness with the bears taking over the control from the bulls. Antoni Trenchev, co-founder and managing partner of Nexo, said:
“If Bitcoin doesn’t hold $20,000, then $18,900 comes into play before a date with the June intraday low of $17,600. Close below that and it doesn’t look pretty.”
Many other crypto market strategists believe that Bitcoin could drop to lower support levels. It will be interesting to see whether Bitcoin will touch its June lows of $17,500. Galaxy Trading warned its Twitter followers that losing crucial support can see the BTC price going all the way to $14,000.
#BTC
On a monthly TF things look really uglyIf in 3 days monthly candle closes below 20k , this could trigger a big sell off to at least 14k where the next big support is located
The reason is close below 19900 means bearish engolfing candle which in a big TF is really bad 💡 pic.twitter.com/LKBeLpKK9A
— GalaxyTrading (@GalaxyTrading_) August 28, 2022
Ethereum Sees Greater Fall
Over the last weekend, the ETH price tanked by 12-15% and is currently trading under $1,450 levels. This is a nearly 25% retracement from its highs close to $2,000 a few weeks ago. ETH is now showing greater volatility just ahead of the Merge upgrade. In a note on Friday, Bitfinex analysts wrote:
“Ethereum’s drop ahead of the impending Merge is also of note as bearish sentiment appears to be taking hold across all so-called risk assets. The volatility that has become so characteristic of the digital token space shows no signs of abating.”
Read more about Ethereum here.