After Bitcoin surged above $40,000, sideways moves were reinforced, and the leading cryptocurrency ranged between $39,223 and $41,500 the price is now consolidating in the middle of the price range
Bitcoin is still stable above the $40K level
After Bitcoin surged above $40,000, sideways moves were reinforced, and the leading cryptocurrency ranged between $39,223 and $41,500 the price is now consolidating in the middle of the price range, since April 14 the price action has been in a narrow range.
Since April 11, the selling pressure of bitcoin has eased as it fell to $39,223 to trade over the past week above the psychological $40,000 level, the cryptocurrency is not heading higher to keep the price stable above the current support level.
It could go down to $30,000
On April 12, it was reported that Bitcoin fell below the $40,000 price for the first time since March 16 due to reduced risk appetite among investors, as the focus of markets was on US Consumer Price Index data released last Tuesday, amid strong expectations of significant increases in Fed interest rates and balance sheet plan cuts.
Many market experts predicted that the bitcoin price could reach $30,000 by June, as it was noted that since the beginning of 2022 the price of bitcoin has continued to fluctuate between the $34,000 to $48,000 range, and briefly rose at $47,000 on March 29, but Still below the all-time high of $67,000 that was recorded in November 2021, there is a huge gap, as of now Bitcoin price in 2022 is going in a downtrend.
One market analyst said that Bitcoin is expected to enter a recession over the next few years, and countries have strengthened supervision of cryptocurrencies.
According to the Financial Times, the UK’s Financial Conduct Authority said on April 7 that it would increase its staffing to crack down on “problem companies” in the financial services industry and would also draft new regulations to cover crypto assets, including backed ones. By traditional assets which are stable currencies.
Factors disturbing market sentiment
The overall background to this cryptocurrency decline is complex and the factors disturbing market sentiment are as follows:
The first is that the conflict between Ukraine and Russia is not over yet, and it seems to be showing a continuing trend, which will fully affect the global political and economic structure, which is constantly moving to the financial market.
On the other hand, the impact of the novel coronavirus epidemic continues to this day, and its pressure on the supply chain of the global economy has continued, which also affected global investors' expectations of the speed of economic recovery.
The most important thing is that after imposing the above-mentioned unstable factors, the Federal Reserve decided to aggressively raise interest rates and cut off the money supply to the economy, making the market outlook uncertain.
In the field of cryptocurrencies, some people have expressed pessimism about the market outlook. After analyzing the global situation, experts believe that as the Federal Reserve seeks to combat inflation and diminish the capital being pumped into the economy, not only the stock market but also the market value of currencies is likely to shrink. Digital, Bitcoin and Ethereum are expected to decline further.
Bitcoin Correlations
Correlation between cryptocurrencies and US technology stocks has risen sharply in the past few weeks, indicating a growing perception among investors that… digital assets Vulnerable to a tight monetary environment, but this is in contrast to the massive stimulus the Federal Reserve pumped into the market during the Covid-19 pandemic, which pushed Bitcoin to a record $69,000 in early November 2021.
Meanwhile, Treasuries, gold and the dollar have been negatively correlated (to varying degrees) with Bitcoin lately, although this is far from as stable as previous years suggest.
Despite this, it is not clear what factors influence the movements of the leading currency, at least on a relatively consistent basis, but it seems that Bitcoin is behaving like a somewhat risky asset.
A professional technical and economic analyst in global financial markets since 2004. He holds a Master’s in Business Administration from the American University in Cairo. He works as an economic writer and technical analyst for many international financial companies. He writes daily economic and technical analyzes for many Arabic and English websites specialized in the field of stock exchanges and financial markets.
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