Bitcoin (BTC) continued to disappoint hodlers on April 7 as the Bitcoin 2022 conference went live to weaken BTC price performance.
The Fed prepares a monthly reduction of the balance of USD 95 billion
Data from Cointelegraph Markets Pro and TradingView tracked the BTC/USD pair as it fell below several levels of support to hit its lowest level since March 23.
With a $42,741 investment in Bitstamp on Thursday, the largest cryptocurrency was decidedly less bullish than the previous week, with analysts quick to point to contributing factors.
Monetary tightening from the central bank, specifically the US Federal Reserve, remained the favourite, which has a potential long-term impact on risk assets going forward.
“The biggest hurdle for Bitcoin and macro-sensitive commodities like crude oil and copper stems from potential stock market declines”, explained Mike McGlone, chief commodity strategist at Bloomberg Intelligence.
“Near-term risks are rising as the Fed steps up its fight against inflation, which could include efforts to cool the wealth effect.”
Previously, the Fed had announced that it planned to reduce its roughly $9 trillion balance sheet by $95 billion per month beginning in May.
The collateral effects of the war between Russia and Ukraine, namely, retaliatory sanctions also continued to cast a shadow, despite the unlikely successes of the Russian ruble, which was trading above pre-war levels. The BTC/RUB pair is down 32% from all-time highs.
In the European Union, meanwhile, the European Central Bank’s own balance sheet reached new all-time highs.
Therefore, Bitcoin bulls had a lot to be wary of, as evidenced by the loss of ground in recent days, which had pushed the BTC/USD pair back into its 2022 trading range.
Popular Crypto trader Ed managed to call the current lows after noting a “drop from support”.
for now thinking we do this ABC pic.twitter.com/v93k8ZFbV6
— Ed_NL (@Crypto_Ed_NL) April 6, 2022
Market sentiment turns sour
The broader crypto mood suffered in tandem, as evidenced by a sharp drop in the Crypto Fear & Greed Index on Thursday.
After hitting its ‘greed’ zone for the first time this year, the classic sentiment indicator returned to ‘fear’ territory following losses over the past two days.
The index’s TradFi counterpart also returned to “fear” with a score of 44/100 on Thursday.
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