Bitcoin is facing a bearish price movement in the short term. The first cryptocurrency by market capitalization has been rejected once again as it is trying to regain the high area around its current levels and could test the next critical support area.
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At the time of writing, Bitcoin was trading at $45,500 with a loss of 2% in the last 24 hours and last week. The benchmark cryptocurrency saw a comfortable rally at these levels, but the bulls were unable to sustain the momentum beyond this period.
With Bitcoin heading to the downside, there are about $20 million in bid requests that could act as support, according to data from Indicators of Materials (MI).
As shown below, $44,000 holds the largest support with $11 million in bid requests. MI records a massive sell-off from Binance’s order books, with hackers dumping up to $50 million in the last day contributing to the drop in the price of BTC.
To the upside, resistance looks heavy and could prevent Bitcoin from reclaiming previous highs. MI records over $40 million in orders or sell orders. An increase in selling pressure suggests that the bears could take over price action, at least, in the short term.
If the bulls are able to maintain the current levels, which seems unlikely due to the above, BTC price could pressure the late shorter and make another push to $48,000 and $50,000. However, Bitcoin has not been able to break through these levels.
Since the beginning of 2022, the price of BTC has been moving in a close range between $35,000 to $48,000. The current rush of relief was caused by more clarity about the monetary policy of the US Federal Reserve (FED).
The rally was primarily driven by retail investors, who, in the shorter time frames, were the only investors buying a category in the recent price action. This adds to the potential bearish thesis as retail lacks the firepower to sustain these levels.
As noted by analyst Will Clemente progress different perspective:
This is really an interesting scheme. Hashtags (0-1 BTC) are currently buying at the second highest price in Bitcoin history. Looking at retail holdings, most of the rally has coincided with macro tops, but on several occasions, they have bought strategically. This height is anomaly.
Bitcoin in the long term, is retail buying the highest?
As mentioned, the US Federal Reserve decided to start the tapering process. This may have long-term downside repercussions for investors, but the financial institution was within market expectations.
This new cycle of economic tightening could unfold over the next year. In the meantime, Bitcoin and other cryptocurrencies could benefit from the transformation of the current financial system.
According to a report by QCP Capital, the global financial system has changed as a result of the expropriation of Russia’s savings. The state invaded Ukraine and the international community responded with this action.
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QCP Capital believes that this will lead to demand for neutral, global and standalone assets. The company said:
Cryptocurrencies are quickly becoming an attractive alternative as an independent financial asset that can be digitally stored, exchanged, and isolated from international control. In light of recent events, it is our view that we will soon see a major central bank cut off BTC buying – and that will be bullish in the longer term as BTC gradually moves towards being a reserve asset.