All signs are pointing to a lower Bitcoin price
Bitcoin rose a week ago to hit $43k and since then, it has traded pretty much range-bound. Volumes in the chart have been declining (Coinbase). RSI is still trending downwards and even other risk assets are pointing to a pretty bad week for Bitcoin.
It is not just Coinbase, but volumes across all exchanges have been falling during the last week. Possibly, most investors/traders are waiting for Bitcoin to pick a direction before engaging in high-volume trades.
Open Interest has stayed pretty much flat to echo the same sentiment as volume. Not much push from the futures market either to propel Bitcoin and thus altcoins higher.
BTC Funding rates haven't changed in the last week. There is still room for rates to go further in negative territory and therefore, like RSI, this too indicates that there is room for Bitcoin to fall further before one can say that BTC is oversold.
Let's look at other risk markets for cues. S&P futures are trading below 50 DMA and inflation/Fed overhang is preventing markets from bouncing above the aforementioned indicator.
While typically in the past, markets have found support at 50 DMA, the scenario then was slightly different. Fed was supportive of the markets and was not worrying about inflation. Now, the Fed is trying to reduce liquidity in the markets. A drop to 200 DMA can happen if the Fed sounds overly concerned and it all depends on the tone of the Fed in the coming meetings. A drop in S&P will ensure a steep fall in crypto prices.
US rates have been rising sharply and I do not FX markets signaling any weakness for the dollar either. Seems like people are increasing their cash piles for the future and simply de-risking their books.
All of the above simply points to one thing. Bitcoin isn't going to be the flavor of the month and the uncertainty will continue to cloud Bitcoin's price in the next few months as well. The next big support is $30k. There's nothing else supporting Bitcoin above that in case risk appetite does not return to global markets.
Posted Using LeoFinance Beta
