By: Joshua Aldio
Bitcoin’s price slipped under $40,000 Wednesday morning as several factors — such as rising inflation, geopolitical crises, and change in monetary policy — continue to drive extra short-term volatility in the crypto and stock markets. The crypto market has increasingly tracked the stock market in recent months, which makes it even more intertwined with global economic factors.
Minutes from the Fed’s March meeting last week showed its plan to shrink its balance sheet by $95 billion each month to combat inflation. The March consumer price index, which measures changes in the cost of food, housing, gasoline, utilities, and other goods, rose by 8.5% from a year ago — the largest inflation surge since 1981. The war in Ukraine also continues to contribute to increased market volatility.
The last time Bitcoin had been stuck below $40,000 was in early March until it jumped in price by 10% to above $42,000 following President Joe Biden’s signing of a sweeping executive order on cryptocurrency. Biden’s executive order called for government agencies to create a plan to regulate cryptocurrency, and to consider a government-issued central bank digital currency. It marked the first concrete steps by the White House to regulate cryptocurrency. By the end of March, Bitcoin was hovering above $45,000 and surpassed the $48,000 mark several times.
“Volatility will most likely return to Bitcoin – and the incumbent financial markets – amid continuing geopolitical risks and growing concerns on the economic outlook,” the trading team for Bitfinex said in a tweet. Bitfinex is a Hong Kong-based cryptocurrency exchange.
Bitcoin Technical Analysis
Bitcoin’s price is moving downward as we can observe from the chart above. We foresee that Bitcoin’s price will form a significant Bearish Flag Pattern. This indicates that a bearish price movement will occur in the future when a breakout of the pattern happens.
Trading Call: Sell Limit at $44,000 or Sell on Pattern Breakout.
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DCD Reference : BTC/USDT at $44,000
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