On January 13, Bitcoin (BTC) was trending towards its lowest point in over two months when the U.S. stock market opened, with a strong U.S. dollar causing damage to cryptocurrencies.
BTC price violates $90,000 after two months above
According to data from both CryptoMoon Markets Pro and TradingView, the BTC/USD exchange rate fell beneath $90,000, marking the first such dip since mid-November.
Market watchers had been eagerly awaiting this development, which resulted in daily losses close to 5%, leading to over $500 million in crypto long positions being liquidated, as reported by the tracking service CoinGlass.
The uncertainty surrounding the markets and the strong increase in the value of the U.S. dollar before the inauguration of President-elect Donald Trump led to widespread selling off of high-risk investments.
The S&P 500 and Nasdaq Composite Index opened down 0.8% and 1.6%, respectively.
In response, certain individuals reinforced their pessimistic Bitcoin price predictions, with Keith Alan, a co-founder of Material Indicators, even suggesting potential lows could reach back to the previous year’s high of approximately $69,000.
As a crypto investor, I find reassurance that BTC has robust technical support around $86k. This level coincides with the bottom of the most recent consolidation channel, where it intersects with my 100-day moving average – a significant technical indicator in my trading strategy.
“Secondary support is at the prior (brief) consolidation at ~$76k, but the strongest support is at the R/S Flip line at $69k which was the 2021 Top.”
Alan reacted to a fresh caution issued by experienced trader Peter Brandt the previous day, which pointed out the potential formation of a bearish head-and-shoulders reversal pattern in Bitcoin’s price against the U.S. dollar.
In his subsequent question, he asked if either Team Green or Team Red would emerge victorious in their escalating confrontation, which they were calling the “battle of the wounds.
As a researcher, I’ve noticed a more positive outlook being attributed to several factors. Among them is the fact that funding rates have reached their lowest levels since last August, a period coinciding with the crypto market’s response to the unwinding of the Japanese Yen carry trade.
Alongside the current state, well-known trader Daan Crypto Trades pointed out striking resemblances in Bitcoin’s recent price movements to those seen in January 2024, according to his interpretation.
“$BTC Are we living in a simulation?” he summarized alongside a comparative chart.
Bitcoin, crypto “inflation hedge” in focus
As the U.S. macroeconomic data releases approached, QCP Capital kept a close eye on them, understanding that these could potentially introduce more market turbulence.
According to CryptoMoon’s recent report, inflation has emerged as a new concern for risk-asset traders and the Federal Reserve. The latest employment figures, specifically the December nonfarm payrolls, have strengthened the argument for maintaining higher interest rates for an extended period.
Has inflation returned? It appears that the U.S. economy might be heating up excessively, as evidenced by last Friday’s exceptionally high job creation figure of 256,000, significantly surpassing the anticipated 164,000.” This was shared with Telegram channel subscribers on that day.
“After last week’s macro data, rumors of any imminent rate cuts have gone up in smoke as equities have tumbled lower. Potential Trump-era tariffs have also ignited more inflation fears.”
As a crypto investor, I’ve been pondering about the potential role of cryptocurrencies as a hedge against inflation. The company has mentioned that any unexpected macroeconomic developments could provide a significant challenge for crypto to prove its worth in this regard. In other words, it might be these unforeseen situations that really put cryptos to the test as a reliable inflation hedge.
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2025-01-13 18:20