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Bitcoin drops below Saturday low print; Fed, Russia in focus

CryptocurrencyJan 24, 2022 10:46
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By Samuel Indyk

Investing.com – The price of Bitcoin slipped below Saturday’s low print on Monday morning as investors continue to look ahead to Wednesday’s Fed meeting for hints on how quickly the central bank plans to tighten policy and reverse its emergency stimulus brought on at the start of the pandemic.

On Saturday, Bitcoin hit a low print near $34,100 but recovered slightly on Sunday to trade as high as $36,500. However, Bitcoin has remained under pressure on Monday and dropped below $34,000 for the first time since 25th July last year as markets remain in risk-off mode ahead of the key central bank meeting.

Federal Reserve in focus

Wednesday sees the FOMC meet for the first time this year. Expectations are for the central bank to set the scene for an interest rate hike at the March meeting when asset purchases are scheduled to end.

The recent hawkish shift from the central bank comes amid historically high inflation levels, not just in the US but across the globe. US CPI hit its highest level in nearly 40 years in December, in the UK it reached its highest in 30 years and in the Eurozone hit its highest on record.

The higher prices are likely to lead to a more aggressive tightening of policy than previously expected which could end up weighing on Bitcoin, as the asset has acted as a risk asset recently. Cryptocurrencies have tended to move in lockstep with other riskier assets, such as the tech-heavy Nasdaq, in recent weeks, and another hawkish pivot from the Fed could see losses extend further. On the other hand, if the Fed were to be less hawkish than expected then we could see the opposite and Bitcoin may find some support, at least in the near term.

The situation on the Ukrainian border is also adding to the negative risk tone currently, which again could be weighing on Bitcoin and other cryptocurrencies. The US and UK have ordered families of staff at embassies in Ukraine to leave amid fears that Russia could make an incursion.

“Military action by Russia could come at any time and the United States government will not be in a position to evacuate American citizens in such a contingency,” the US Embassy in Ukraine said in a statement on its website.

Technical Charts

Bitcoin now trades over 50% below its all-time high that was reached in November.

After breaking below Saturday’s low and $34,000, the next major support lies at the psychological $30,000 level.

To the upside, a return above $40,000 may be needed to ease the downside pressure.

Other coins

It’s not just Bitcoin that is facing selling pressure. Every cryptocurrency in the top 100 by market cap is trading lower on Monday morning.

The altcoin Solana is trading with losses of almost 20% in the last 24 hours after the blockchain was suffering from network instability issues that involved duplicate transactions.

Of the other major coins, Ethereum was lower by 11%, Cardano down 14%, XRP down 9% and Dogecoin also down 9%.

Bitcoin drops below Saturday low print; Fed, Russia in focus
 

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Comments (4)
Abdalgadir Muhammad
Abdalgadir Muhammad Jan 24, 2022 11:41
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governments just wants to keep majority of the public as poor as they can to control them.. crypto actually give them a chance of financial freedom..and they hate it..
Tony Hadley
Tony Hadley Jan 24, 2022 11:38
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Not to mention a toxic carbon footprint
Tony Hadley
Tony Hadley Jan 24, 2022 11:37
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Zero intrinsic value. Just hype. 100+ companies selling hype.
Sam Dur
Sam Dur Jan 24, 2022 11:12
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China banned mining, Russia declared it considers it as well, EU and US regulators seek how to regulate Crypto and discuss measures of so called Energy impact. They are frightened of Bitcoin, the financial freedom it brings to the nations around the World. No inflation, no "monetatary policy" that provides strongs with trillions of dollars. Free Digital Finance is under atack? Crypto comumity - stay united!
 
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