Bitcoin (BTC), which was traded on Wall Street opened February 16, fell as investors waited for comments from the United States Federal Reserve.
BTC/USD 1-hour candle charts (Bitstamp). Source: TradingView
Trader: Chop and then break “makes sense”, for Bitcoin
Cointelegraph Markets Pro and TradingView data showed a rapid decline in BTC/USD at the beginning of trading. Bitstamp recorded lows of $43,312
Overnight, the pair hit $44,500, but these gains quickly dissipated as traders waited for cues from Fed officials on inflation, asset purchases tapering, and the important interest rate hike schedule.
Because Bitcoin and altcoins are closely correlated with stocks, rate hikes that could lead to a downturn in traditional markets could also spell doom for crypto investors.
The Federal Open Market Committee (FOMC), will meet at 7 p.m. UTC.
Gina Martin Adams (chief equity strategist at Bloomberg Intelligence), commented on the event. She suggested that a reduction in the Fed’s balance, which now stands at almost $9 trillion, could cause more pain for equities then a rate increase.
“I am still more concerned about the balance sheet that rate hikes. She noted that changes to the balance sheet have explained almost one-third the market’s move since 2010. Every 100-bp decrease in the balance sheets could reduce the forward P/E by 29 bps.
Crypto traders were therefore more cautious than ever.
Crypto Chase, a popular Twitter account, said that there was still more upside and suggested that a pullback or chop before major resistances were breached would make sense.
Rekt Capital, an analyst and Bitcoin trader, was focusing more on the hourly chart. Despite Sunday’s disappointment, the weekly close had the potential to show an uptrend.
It’s mid-week but #BTC is still positioned for an orange circled Weekly Close Lots can still change in the days ahead but this is the Weekly Close that will most likely confirm further upside$BTC #Crypto #Bitcoin pic.twitter.com/dcbu56gmbe
Rekt Capital (@rektcapital), February 16, 2022
BTC bids inch higher
Further encouraging signs were revealed by a look at the order book composition of major exchange Binance that day.
Related: The 2018 Bitcoin price fractal could trap bulls and sink the BTC price down to $25K — analyst
In the past 24 hours, additional buy support was opened at $43,000 and a larger volume support zone at just under $42,000.
Data from Material Indicators, an on-chain analytics resource Material Indicators, showed that sell-side orders of $45,000 were slowly being thinned.
Chart of Bitcoin order book data (Binance). Source: Material Indicators/Twitter