Bitcoin has bounced back below $20,000 after hitting a weekly high of $20,400. According to analysts, the leading cryptocurrency could hit the bottom, but internal and external forces are preventing a reversal of the bullish trend. One analyst says that BTC will make a mid-$18,500-$20,400 move in the short term. Another analyst’s Bitcoin assumptions are shaped by the Fed hawk.
Bitcoin price depends on range, but for how long?
Michael Safai of Dexterity Capital says institutional investors are returning to the crypto market while individual traders are taking a step back. His observation comes in the midst of an ongoing Bitcoin price range-bound move. Safai notes that the game has effectively changed from checkers to chess. In this context, “We could have been playing checkers two years ago. We are playing chess now,” he says. Crypto analyst John Isige’s Bitcoin predictions are moving on this trajectory.
Bitcoin is trading midway between $18,500 (lower range limit) and $20,400 (upper range limit). Sideways price action formed a rectangular pattern, implying general market indecision. The 50-day SMA (Simple Moving Average), red, provides support close to BTC. However, the 100-day SMA (blue) is limiting price action to the upper truth. BTC needs to stay above the 50 SMA to avoid testing the rectangular foothold that could increase the risk of a true breakout to the south.
Negative divergence from price to DMI (Directional Movement Index) increases the possibility of more losses ahead of the new week. In peer form, the OBV (On Balance Volume) indicator confirms the pessimistic estimate as it drops further below the one million mark.
In other words, Bitcoin is at greater risk of discovering downhill levels. In addition, Koindeks.com Investors who have 1,000 or more BTC have not stopped their selling activities now. The chart below from Glassnode shows a 7.64% drop from 2,292 to 2,117 addresses mid-March 21 and October 8, 2022.
The air pressure tends to get heavier as the whales empty their bags. Unless this selling spree is over, your downstream journey is far from over.
Analyst’s Bitcoin predictions depend on Fed’s hawk
Crypto analyst Nicholas Merten says that as long as the Fed remains a hawk, Bitcoin will likely fall. The analyst warns that in this environment, Bitcoin’s bear market could see new lows. In this context, the analyst shares the following views on the Fed’s stance:
Earlier, the Fed was lowering interest rates and printing a ton of money (QE). Now it does the opposite, through quantitative tightening (QT). It is raising interest rates at the fastest pace it has done in the last few decades. On top of that, they’re starting to shrink their balance sheets. That’s tens of millions of dollars evaporating from the money supply.
Merten also says that until the Fed achieves its goal of keeping inflation under control, Bitcoin will likely see more selling pressure. “The Fed is on the right track,” says the analyst, but says that in cooling inflation, he should sit in the driver’s seat. According to the analyst, this is the reason why Bitcoin is falling, as these elements are QT here through higher interest rates and balance sheet reduction. The analyst continues his explanation as follows:
It will continue to set lower highs or lower lows until reasonable terms are sought by the Fed. For this reason, they are probably starting to cool the inflation. It will be on track until the economy starts to slow down as required and returns inflation to its 2% targets.
Merten sees it as possible for the Fed’s current trajectory to bring Bitcoin down to the $10,000 to $12,000 price range. But he says this is where a big opportunity for BTC bulls occurs. The analyst makes the following statement for Bitcoin predictions:
Once we get this range, no one will want to buy Bitcoin. Everyone will think that crypto is going to zero. Finished. Finished. This is the kind of range I’m really excited about. Unexpected capitulation. This is where you get opportunities to buy generational lengths when no one else is willing to pull the trigger.