April 11, 2022

Bitcoin Update

Since the beginning of the week, bitcoin has lost more than 9%. He suffered the greatest losses on Wednesday (April 6) after the publication of the minutes of the meeting of the US Federal Reserve. Cryptocurrency collapsed along with American stock indices.

The DXY dollar index jumped on the statements of the US Federal Reserve. Fed Governor Lael Brainard said a rapid Fed balance sheet cut could begin in May. Kansas City Fed President George said a 50bp rate hike is possible. in May.

The minutes of the March 15-16 meeting show that US Federal Reserve officials signaled their readiness to start reducing assets on the central bank's balance sheet, which reached $8.9 trillion, by $95 billion a month.

Representatives of the US Federal Reserve believe that raising the rate by 50 basis points at once at one or more upcoming meetings will be justified. Expectations of aggressive rate hikes put pressure on the stock market. And since cryptocurrencies remain closely linked to the S&P500 and Nasdaq indices, they are also under pressure and suffering.

The FOMC meeting will take place on May 4. According to the CME FedWatch Tool, there is an 80% chance of a 50bp rate hike.

The dollar index and 10-year US bond yields break new highs daily. Fixing the bitcoin below $45,000 calls into question the further growth of the BTC/USDt pair. The trend line passes through the $42,000 level. The price lies on the trend line. On the 15-minute chart, I do not observe the volumes and activity of buyers. The risks of going below $42,000 have increased.

The price pattern from the $32,917 low is starting to look like an ascending triangle. Volatility is decreasing, the price is clogging. It is rare to see a good triangle on the cue ball, so a different model is implemented in any way. So far, I don't know what will happen.

If the buyers breaks off with a rebound from the trend line and the price exits the B-B channel, then I expect a fall to $39,950. Closing the day above $43,445 will form a bullish engulfing candlestick setup. If the bounce is on volume, then again a recovery to $46,000 could be considered.