Finding Bitcoin’s True Point of Pain, Why Sub $30K Seems Likely
26 Januar 2022 - 11:00PM
NEWSBTC
Bitcoin maintains its bullish short-term trajectory into the U.S.
Federal Reserve FOMC meeting, suggesting the downtrend might be
losing strength. BTC investors have feel the pain in the last
weeks, as the cryptocurrency displays a high correlation with the
U.S. stock market. Related Reading | Bitcoin Whales Take Advantage
Of Market Crash To Gobble Up Millions In BTC As of press time, BTC
trades at $38,301 with a 2.3% profit in 24-hours. Data presented by
Joe Orsini, Director of Research for Eaglebrook Advisors, Bitcoin
has historically experienced a positive performance in terms of
percentage on FOMC announcement days. As seen below, the current
FED Chair Jerome Powell’s administration has boosted the price of
BTC as much as 20% during these days. In addition, the chart shows
that the BTC percentage change in the daily chart it’s typically
moderate during these events. Probably due to the market already
pricing in any potential announcements. With the exception of April
2020, every FOMC meeting is followed by moderate price swings on
these timeframes with the largest downside change near 5%. If
Bitcoin remains on its current trend, it could score yet another
bullish post FOMC trading day. However, when the current Bitcoin
drawdown is compared to that of April 2020, and July 2021, BTC
seems ready for further losses. On the latter periods, BTC dropped
below 60% and 50% before a significant price reversion. On the
contrary, it only briefly recovered when it failed to drop below
the aforementioned percentage. This suggests more downside after a
dead cat bounce probably to the $40,000 area. Bears Ready
Ammunition? Bitcoin Reacts To Macro-Factors During the current
price action, investment firm QCP Capital has seen an increase in
selling pressure for the spot market. In addition, short terms
option contracts have experienced “aggressive buying” as large
investors hedge their positions. Related Reading | Fidelity Says
What We’ve Been Thinking: Countries & Central Banks Will Buy
BTC QCP Capital has seen more confidence in the market as BTC
recovers, but the firm is “not sure” if the market has seen the
lows and will resume its full bullish trend. The firm compared the
change in At-the-money options volumes for BTC and ETH when its
price crashed in May 2021, and today. 10/ While front-end vols
spiked hard with BTC 1-week from 70% to 100% and ETH 1-week from
85% to over 120%, the longer end of the vol curve remained
relatively tame. The curve from March onward moved higher by only
5-6% to a very modest 75% level. pic.twitter.com/f2smBbl4dB — QCP
Capital (@QCPCapital) January 26, 2022 At that time, the metric
recorded a spike of up to 250% for ETH while current volumes
remained “relatively tame”. In other words, the options sector
seems to suggest BTC could be in for more blood. The firm added:
Does this mean that the market has yet to reach it’s true point of
pain? Below 30,000 level in BTC perhaps? A lot of the short-term
price action is going to depend on the Fed statement later today
(…). Given the bloodshed in equities, chances are that we’ll get a
fairly neutral statement and mkt will take that as an excuse to
rally. A short squeeze across the board is likely.
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