FOMO Friday: Bitcoin Takes Another Leg Lower

fomo-friday:-bitcoin-takes-another-leg-lower

BTC Rolls OverThe first full trading week of 2022 comes to a close which means that once again it is time to take stock of the winners and losers. Whether this was a quiet week for you or a week full of action, it’s always good to get the first week of trading under our belts to get back into the swing of things. Talking with traders this week it seems the big move that most have been focused on is the more than 10% drop in Bitcoin. So, let’s take a look at what caused the move and remember, if you caught it? Well done! And if you missed it? There’s always next week!What Caused the Move?Fed Expectations Weigh On SentimentA combination of factors leaned on the market leading cryptocurrency this week. Firstly, the ongoing uptick in Fed tightening expectations is having a big dampening effect on BTC sentiment. It seems that traders are picking up where they left of in terms of anticipating the Fed’s next moves. The release of the FOMC meeting minutes this week confirmed that the Fed is firmly in hawkish mode now with pricing for a March rate hike sitting at almost 70%.With a higher level of institutional players now engaging with BTC, the market is taking on more traditional risk-asset characteristics. With this in mind, BTC is likely to remain geared towards lower prices while Fed tightening expectations continue to develop.Kazakhstan Mining Outage One key, bearish development for BTC this week was the massive disruption caused to the network by the situation in Kazakhstan. On the back of a widespread protesting and rioting over the weekend and into this week, the government shutdown the internet. With the country hosting around 20% of global BTC mining as of Q3 2021 the outages have raised questions once again around vulnerabilities within the BTC network, leading to a sharp drop in sentiment. This comes on the back of the regulatory overhaul in China last year which struck a blow to BTC mining also.Technical ViewsBTCThe breakdown below the rising trend line from last year’s lows continues to develop here. Price has now broken below the 45405 level support and is testing the 41510 level. While both MACD and RSI are bearish here, the overall decline has been framed by a falling wedge pattern, suggesting risk of an upside reversal cannot be ruled out. For now, however, the focus is on a further push towards 37030 next.

Source: Tickmill

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