While inflation in the United States is at an all-time high of 6.8%, the highest since 1982, currently seems to lead to more fear than confidence in the cryptocurrency market. When the Consumer Price Index (CPI) report came out yesterday, bitcoin (BTC) initially yes, but then corrected harder downwards.
Market fears appear to be linked to the Federal Reserve, which may announce the next week due to high inflation quantatitive easing (QE) to slow down. The situation regarding Evergrande also still causes a lot of uncertainty. The fear & greed index then drops further and comes to “extreme fear (16)”:
Bitcoin Fear and Greed Index is 16 – Extreme Fear
Current price: $48,150 pic.twitter.com/csX1rfwt5e— Bitcoin Fear and Greed Index (@BitcoinFear) December 11, 2021
Bitcoin seems surprisingly less stable this time due to inflation news than stock markets. That may show that BTC is still used more for speculation than as hedge, or cover. For now then.
Despite being far from inverted, the yield curve flattened by 25 basis points last week, its largest weekly drop since 2012 in a sign of rising market uncertainty. pic.twitter.com/VTEqdJN3jT
— Kaiko (@KaikoData) December 10, 2021
Bitcoin price fluctuates with a lot of uncertainty
From bitcoin price fell back to $47,400 on Thursday evening, but was able to recover to $48,700 by Friday morning. However, bitcoin was rejected there again and the price subsequently fell to $47,800. Then the CPI report came out.
Bitcoin then rose sharply and touched $50,100, but was strongly rejected and the price plummeted again. BTC then, just like the day before, found again support around $47,400. The price bounced the same twice here last night and was then able to recover to $48,500. However, bitcoin then started to fall again.
Subsequently, the BTC price again tested the support at $47,000 and it held for now. That’s just above 200 days simple moving average (SMA) which is now around $46,700 and where bitcoin also found support last week. Bitcoin made another big bounce and appears to be holding around $48,500 for now.
Bitcoin has been in a downward trend for more than a month now, when we were actually expected to see a final sprint before the year is over. As long as that 200-day MA lasts, there is still a chance that we will see a trend reversal, but for now it all looks very uncertain.
Volatility increased again as strongly as a result of the inflation news, but now appears to be decreasing again. There still seems to be a good chance that bitcoin will consolidate in its current range for a while yet. Should bitcoin fall through that 200-day MA, bitcoin could plummet all the way to $42,000.
Should bitcoin rise, there may now be a lot of resistance at various levels just above its current price. The USD 49,000, the USD 50,000, and especially the USD 53,000 to USD 55,000 area around the 100-day MA are likely to show a lot of resistance. The chance of a “moonshot” in 2021 is decreasing further and further.
2/ Surpassing that level, #Bitcoin would face little resistance until $55k.
1.08 million addresses pictured as out of the money are expected to create resistance between $54,267 and $55,750 as they may look to break-even on their positions at this range pic.twitter.com/0ZbHVDLAUZ
— IntoTheBlock (@intotheblock) December 10, 2021
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