In a sign the token continues to struggle, the Bitcoin price hit lows of US$19,848 over the past 24 hours. That again put it within a whisker of dropping below what many analysts believe is a key support level of US$19,500.
Bitcoin remains down about 70% from its 10 November all-time high and down 57% so far in 2022.
What’s pressuring crypto prices?
It’s not just the Bitcoin price that’s taking a beating this year.
Almost every top crypto has been sold off heavily with some, like the TerraUSD stablecoin, collapsing completely. This has seen the total global crypto market cap fall from approximately US$3 trillion in November last year to some US$1 trillion today.
The biggest factor pressuring cryptos has been hot-running inflation and the accompanying interest rate hikes needed to cool fast-rising prices down.
While tightening by the RBA and other global central banks all contribute to the impact, it’s the US Federal Reserve that’s most closely watched.
Recent outsized interest rate hikes by the US Fed have contributed to a 30% year-to-date decline in the tech-heavy NASDAQ.
The Bitcoin price moved in line with other risk assets this year, and could come under more pressure.
Fed chairman Jerome Powell said he “anticipates that ongoing rate increases will be appropriate”.
Powell added, “Inflation has obviously surprised to the upside over the past year, and further surprises could be in store.”
Having lost more than two-thirds of its value since November, is the Bitcoin price at a bottom?
According to Mark Newton, head of technical strategy at Fundstrat Global Advisors, the answer is yes and no. Newton said (courtesy of Bloomberg):
Bitcoin has made a bottom but probably not the bottom. Upside targets should materialise near US$23,300 with a max near US$24,800 before prices pull back to likely challenge lows into the final week of June.
Analysts at Informa Global Markets say crypto investors will need to wait out the US Fed’s aggressive tightening policy before we see the Bitcoin price reach a bottom.
“Macroeconomic conditions need to improve and the Fed’s aggressive approach to monetary policy has to subside before crypto markets see a bottom,” they said.
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