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These Are The 3 Levels Bitcoin Must Hold To Avoid Doom

Bitcoin is showing signs of bullish momentum on lower timeframes. The cryptocurrency managed to stay above its 2017 all-time high, around $20,000, as the U.S Federal Reserve (Fed) announced an increase in interest rates by 75 basis points. Related Reading | Bitcoin At $20K Could Be ‘New Bottom,’ Commodity Expert Suggests, And Here’s Why As the financial institution was within expectations, Bitcoin and other risk-on assets were able to see some relief. At the time of writing, the number one crypto by market cap stands at $21,300 with a 3% profit in the last 24 hours. Data from Glassnode indicates that BTC holders experienced their largest Realized Loss in history as the cryptocurrency failed to remain in its previous range, around $28,600 to $31,500. BTC investors lost over $4.2 billion which, as the on-chain analytic firm claims, “eclipses all major sell-offs in 2021” and 2020. These losses affected long-term BTC holders (LTH). Unlike speculators and short-term BTC holders, LTHs are often impervious or more resilient to downside price action. This time the selling pressure was too hot and forced these investors to capitulate out of their positions: Long-Term Holders however realized major losses, equal to 0.007% of the Market Cap per day. This is almost as large as March 2020 and is the first major LTH capitulation event in the 2021-22 cycle. The downside pressure has been mitigated for the short term. However, if the bears resume their attack, Bitcoin must hold 3 critical levels to prevent a doom scenario. This could set the cryptocurrency back to its 2020 levels and trigger an even bigger capitulation event. According to Whalemap, BTC’s price must stay above $19,100, $16,100, and $14,000 to prevent this scenario. Conversely, the capitalization event described by Glassnode has pushed BTC’s price into its Realized Price zone. As Whalemap added, every time BTC’s price has touched this level, as the chart below shows, the cryptocurrency is able to bounce back to previous highs. Will Bitcoin See Bullish Continuation? Trading desk Cumberland believes the global financial markets are “steadily grinding lower”. The U.S. Fed announced the first of a series of interest rate hikes which could prove inefficient to reduce inflation in the U.S. dollar. The crypto market and Bitcoin could enter a state of “maximum violence”. Supported by the reduction of global liquidity, less money available to purchase BTC, and the reduction of credit. The latter has begun to take an effect. Related Reading |  Bitcoin Bounces Back Before Hitting 2017 Peak, Is The Bottom In? Crypto could see a bigger loss because it lacks the countermeasures available for traditional finance actors. While the crypto market could see another series of liquidations and more capitulation events on the backdrop of less liquidity, Cumberland claims these are signs of a potential market bottom: It’s difficult to predict the scale of the liquidations which have yet to occur, but this type of activity tends to correspond with prices bottoming out. No one has enough dry powder to fight the Fed, but the faster they hike, the shorter hike cycle and the sooner the reversal.

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Arthur Hayes’ Crystal Ball Predicts: Bitcoin And Ethereum To See Carnage In June

Former BitMEX CEO Arthur Hayes posted another prediction for Bitcoin and Ethereum. At the same time, the top cryptocurrencies by market cap continue moving in a tight range with today’s U.S. Consumer Price Index (CPI) increasing volatility across the board. Related Reading | TA: Bitcoin Resumes Decline, Why BTC Could Revisit $40K At the time of writing, Bitcoin trades at $40,500 with a 1% loss in the last 24-hours and a 13% loss in the last week. Ethereum trades at $3,000 with similar performance over this period. As NewsBTC has been reporting, Hayes believes the current financial system supported by the “Petrodollar” has ended. This opened the door for a new system where independent currencies, such as Bitcoin and Ethereum, will see more demand. Ethereum stands to benefit the most in the short term as it will transition to a Proof-of-Stake (PoS) consensus algorithm. Thus, it’ll see a 99% decline in its energy consumption with a staking system that will yield rewards to network validators. Institutions will take shelter from inflation using this system, Hayes argued. However, the top cryptocurrencies will undergo an increase in selling pressure in the short to medium term as the U.S. Federal Reserve attempts to tame inflation. This will lead to a bloody financial market coming May when the FED will begin its tightening program. At the time, the former BitMEX executive claims Bitcoin and Ethereum show high levels of correlation with traditional markets, specifically the Nasdaq 100 Index (NDX). In other words, crypto is trading as a big tech company. Hayes believes this correlation needs to trend to the downside before Bitcoin and Ethereum can begin their ascend to new all-time highs. Before that happens, the NDX and the traditional market will be pushed into the red with potential drawdowns of 30% to 50%. This could take BTC and ETH to re-test their critical support zones at around $30,000 and $2,000, respectively. Proof Of The Ethereum and Bitcoin Carnage As evidence of this upcoming bloodbath, Hayes claims the NDX on its one-year chart demonstrates potential weakness. The Index failed to break above the 61.8% Fibonacci Retracement with a prolongation of the downtrend, this suggests further losses. Hayes said: The chart tells me the NDX will continue lower, test its local low, and break decidedly below it. I believe the next stop after that is to test 10,000 (…). the crypto capital markets are the only free markets left globally. As such, they will lead equities lower as we head into the downturn, and lead equities higher as we work our way out of it. Bitcoin and Ether will bottom well before the Fed acts and U-turns its policy from tight to loose. Related Reading | Bitcoin Price Plummets Below $40,000 As Crypto Market Tallies $440 Million In Liquidations In the long run, Bitcoin will hit $1 million per coin and Ethereum over $10,000, Hayes previously stated. A lot depends on the FED which seems trapped in its current situation, and in the Ukraine-Russia conflict and its resolution.