Currently, there are analysts who believe that prices in the crypto industry may continue to fluctuate sharply, but not as violently as in recent years.
so-called Bitcoin “Death cross” – a bear market-specific index that appears when the 50-day moving average (MA) falls below the 200-day moving average – looks set to be confirmed this week on amid fears about the withdrawal of aid launched by the US central bank, a pessimistic development in terms of the price of Bitcoin and other risky assets, writes CoinDesk.
Banking giant Goldman Sachs expects the US central bank (Fed) to raise interest rates at least fourfold in 2022, as it had previously anticipated three rate hikes, according to Bloomberg.
The latest report on the US labor market, which showed that unemployment fell to 3.9%, strengthened the arguments that the Fed will synchronize the increase in interest rates with the end of asset purchases in March.
According to data provider CME Group, investors have a 73% chance that the Fed will increase its 25 basis points in March from 61% last week.
Fears over the Fed’s new decisions seized the crypto market late last quarter as the US institution turned its attention to controlling inflation, with the main focus until recently being to support the workforce. In December, the Fed announced at least three rate hikes by the end of 2022 and a halt to the asset purchase program by March.
Photo source: CoinDesk.com
Bitcoin set a record high of almost $ 69,000 on November 10, falling by almost 40% in the meantime. Now, the death cross index, coupled with the macro outlook, could stimulate pessimism inside the market.
The index data, calculated to predict the next bear market, is mixed. According to studies conducted by the crypto-exposure exchange Kraken, many results of the so-called “death cross”, including those of 2014 and 2018, coincided “either with a sell-off in the following days or with a downward trend which confirmed the bear market ”.
However, the “crosses” of June 2021, March 2020 and October 2019 were false signals that the cryptocurrency industry is heading for an acute period of decline. Moreover, the consolidation that took place following the “death cross” data of June 2021 generated a new wave of optimism along the crypto segment. Often, the market is ready to return to growth once an MA index is confirmed.
At the time of the news, the price of a Bitcoin was $ 41,864, up 0.6% in the last 24 hours.
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