Bitcoin and the crypto-currency market came under heavy selling pressure this weekend, this happened after the Fed meeting in Jackson Hole last Friday, where Chairman Jerome Powell said that fighting inflation is the main goal of the Fed.
President Jerome Powell said that fighting inflation is the Fed’s primary objective. He also hinted at aggressive quantitative tightening measures. Under the influence of the news related to the Jackson Hole meeting, bitcoin is trading at $19,843, losing its crucial $20,000 support.
According to Google Trends data, search interest in bitcoin has dropped significantly since mid-June 2022. In fact, search interest in BTC has fallen to a 12-month low. In mid-June 2022, search interest for BTC reached a one-year high. However, since then, search interest in BTC has dropped by over 70% to date.
In the past, notable changes in bitcoin’s search activity have also been reflected in its price. One such example was in December 2017, when both search activity and the price of BTC peaked.
The bears take control of the bulls
As the Fed moves down the path of interest rate hikes to combat inflation, risky assets such as bitcoin and crypto have come under pressure. Like bitcoin, the broader crypto market has come under selling pressure.
Today, the MVIS CryptoCompare Digital Assets 100 Index fell 2.5 percent. Commenting on the development, Cici Lu, managing director of consulting firm Venn Link Partners, said:
“Money is flowing out of risky assets. Crypto has followed the sharp adjustment in the US stock market. The markets didn’t like what he had to say and bitcoin is resuming its role as a high-beta asset.”
BTC’s fall below $20,000 portends more weakness as bears take control of the bulls. Antoni Trenchev, co-founder and managing partner of Nexo, said:
“If bitcoin doesn’t hold $20,000, then $18,900 comes into play before a date with the June intraday low of $17,600. A close below that and it doesn’t look good.”
Many other crypto analysts believe that bitcoin could fall to lower support levels. It will be interesting to see if bitcoin hits its June low of $17,500. Galaxy Trading warned its followers on Twitter that the loss of crucial support may see the price of BTC go as low as $14,000.
On a monthly TF things look really ugly
If in 3 days monthly candle closes below 20k , this could trigger a big sell off to at least 14k where the next big support is located
The reason is close below 19900 means bearish engolfing candle which in a big TF is really bad 💡 pic.twitter.com/LKBeLpKK9A
– GalaxyTrading (@GalaxyTrading_) August 28, 2022
Ethereum experiences a bigger drop
Over the past weekend, the price of ETH has fallen 12-15% and is currently trading below $1,450 levels. This is a nearly 25% retracement from its highs near $2,000 a few weeks ago. ETH is now showing more volatility just before the merger upgrade. In a note Friday, Bitfinex analysts wrote:
“The drop in Ethereum ahead of the impending merger is also worth noting, as bearish sentiment seems to be taking hold in all so-called risk assets. The volatility that has become so characteristic of the digital token space shows no signs of abating.”