It looks like the weekly bullish candlle the week before was an accident. The price of Bitcoin has continued to decline steadily since the late March. Except for one candle, the BTC price has already formed dozen weekly bearish candles.
The BTC price is showing a new anti-record. In less than a day, the price of Bitcoin dropped from $28,000 to $23,500. Is is the lowest Bitcoin price in two years.
The reason for the decline in the BTC price was the data on the consumer price index in the United States, published late on Friday. The indicator was 8.6%. It is the highest rate of inflation in the US on an annualized basis. Then it caused unsettling sentiment in the Asian markets, leading to Bitcoin sell-offs. Today losses are almost all stock indicators in the Asia-Pacific region.
The cryptocurrency market is becoming more and more like the traditional stock market. And Bitcoin is losing its function of protecting capital from inflation.
This week the FOMC is to consider the issue of rate hikes. It will put additional pressure on Bitcoin and the cryptocurrency market in general. Also noteworthy is Janet Yellen’s speech, in which she warned against including cryptocurrencies in 401(k) plans, adding to the gloom.
It is worth noting that inflation is increasing not only in the United States. The central banks of Canada and Australia have already raised interest rates. The ECB has not yet raised the rate but has already announced that it is stopping buying assets and is ready to raise the rate this summer. All this will continue to put pressure on Bitcoin and the cryptocurrency market.
We previously predicted that the 29,000 level should become a strong support level for the BTC/USD pair. However, this did not happen. The BTC/USD pair quickly fell below this level, after which the sales intensified significantly. The chart shows that the bulls tried to stop the fall in the 27,000 area but were unsuccessful. Having broken through the 27,000 mark, the BTC/USD pair quickly fell below 26,000. The price of Bitcoin continues to show bearish signs, so the immediate support of around 24,000 is likely to be broken. The bulls will try to keep the BTC price in this area. But analysts suggest a price decline to the 23,500 area.