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At the time of writing, the king cryptocurrency fell below $28,000. The price continues to fall. For now, the $ 27,700 support has stopped sellers, but the danger may increase pressure in the coming hours.
Why is Bitcoin Falling?
Investors were already worried about the thousands of BTC entering the Coinbase exchange today and the increasing CDD data over the past few days. Now, with the rising DXY and the Fed meeting on Wednesday, investors are reducing their risk. We will have to wait longer for the Fed to announce a halt to rate hikes because headline inflation is still not where the Fed wants it to be.
Moreover, the Fed has already announced that it will be very careful about early easing. When all this is combined, the expectation that Powell’s announcements will be more bearish than bullish is spreading among investors.
After the recent volume sell-off, Bitcoin has dropped to $27,799. The rise on Sunday was supported by the Binance exchange and sales were heavy on other exchanges. With the decline today, we also saw that the last move was extra speculative. For 7 days, both short and long positions have been steadily cleared.
Cryptocurrencies at a Crossroads
Bitcoin’s decline, which gained momentum today, had a multiplier effect on altcoins. Many altcoins have lost critical support levels and this is certainly worrying. The fact that support levels are being lost so quickly next to hard-overcome resistances makes “investors on edge”. The weakness in bullish confidence also ensures that losses on the Bitcoin front are exponentially increasing in altcoins.
Traders often see high volatility ahead of the Fed, and if you’re not a great trader, it may be in your best interest to step away from the screens these days. After such sudden drops, we also see intermediate rallies to hunt for late shorts. This causes both long and short traders to break out in a cold sweat.
The next support zone of the king cryptocurrency is $27,700 and closes below it could open the door to a steeper decline to $26,500 and $25,200. An announcement or hint of an interest rate ceiling by Powell could be a good catalyst for the price to bounce back on Wednesday. But now? Uncertainty now prevails and Bitcoin sellers look strong.
