Central Bank Push Bitcoin Price To The Downside, Will BTC Bounce?

Bitcoin price is hanging by a fine thread as it recovers gains from yesterday’s trading session. Once again, macroeconomic forces seem to be taking over price action as the number one cryptocurrency by market capitalization looks at a potential abyss downward.

At the time of writing, Bitcoin is trading at $1,077 with a loss of 5% and a gain of 1% in the last 7 days and 24 hours, respectively. BTC is looking at two possible support levels in the shorter time frames to prevent further declines.

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BTC price is moving sideways on the daily chart. source: BTCUSDT TradingView

Bitcoin price reacts to European Central Bank interest rate hike

Today was about to be a volatile day as the heads of two of the world’s largest central banks, the European Central Bank (ECB) led by Christine Lagarde and the Federal Reserve led by Jerome Powell, made important statements.

European Central Bank announce It raised the interest rate by 75 basis points, the largest in its history. In the coming months, the financial institution will continue to rise as it aims to “rein in demand and protect against the risks of a continuing upward shift in inflation expectations.”

In addition to stopping inflation, which is the same goal of the US Federal Reserve, the European Central Bank is looking to slow the euro from crashing against the US dollar. In light of the current macroeconomic uncertainty and a sudden surge in global energy, people have been turning toward the dollar.

This led to the collapse of the European currency, the old financial markets, the price of bitcoin, and the cryptocurrency markets. like Lagarde announce By their metrics, the Euro saw a slight rise which could indicate a positive perception from the market.

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The Euro is reacting to the upside as the European Central Bank announced a rate hike. source: Holger Schaebitz
via Twitter

Selling Increased Liquidity, Can Bitcoin Beat It?

Both Lagarde and Powell agreed that the short term indicated more pain for the financial world. Initially, bitcoin price reacted to the downside but it is still sitting at a crucial support level and it may be able to rebound from $19,000.

This level and $18,600 act as major support and the bulls should hold it to prevent further declines. As NewsBTC reported yesterday, it is important for the bulls to regain the highs of $19,000 and north of $20,500.

However, data from material indices point to headwinds in the short term as the bitcoin orderbook sees a sharp rise in demand (sell) liquidity. $19,400 appears to be a general resistance on the lower time frame with around $10 million in bids.

BTC price (blue line on the chart) is seeing rising sell orders (yellow levels around the price) which could act as resistance in the short term. Source: Material Indicators

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