Everyone knows that crypto is a risky asset. Federal Reserve interest rate hike fuels the selling pressure, bringing a global financial dilemma, especially in crypto and the stock market. Bitcoin is almost 70% down from its all-time high, reflecting uncertainty in the market, whereas Bitcoin led the rally after the covid-19 crash in March 2020.
The Terra (LUNA) fiasco has added pressure on retail investors. As a result, crypto, which was regarded as a valuable asset to provide loans, now becomes one of the discounted assets. It traps several high-profile lenders and hedge fund holders. After consolidating crypto assets, it spiked in 2020 to around $3 trillion in total assets, only to end up with $1 trillion (estimated) in 2022.
Analysts think this time, the downtrend is due to leveraged position unwinding. As the interest is hiking, the traders show a lack of trust in leveraged positions, so the deleveraging cycle hits the market. 2022 will be a year of speculation where crypto markets will wipe out retail investors, whereas big investors will accumulate and gain in the long term.
At the time of writing this post, BTC was trading around $21,238. Bitcoin will face strong resistance around $30K. Though there is no clear support, still, 18K can be considered as a support for the short term, but it may break the level as well.
On the daily chart, RSI is around 36, and the MACD indicator reflects a bullish crossover, but candlesticks are forming on the lower range of Bollinger Bands. That reflects short-term bullishness in the market. It is tough to predict how long it will sustain; however, BTC will not cross the level of $29K this month. BTC price prediction remains uncertain.
On the weekly chart, RSI is in the oversold zone, and the MACD indicator reflects bearishness. Candlesticks are forming on the lower half of the Bollinger Bands, which also suggests bearish momentum in the long term.
We cannot say Bitcoin is bullish until it crosses the level of $32K. After that, it may consolidate between $50K and $30K. It is time to accumulate some coins for the long term. Traders can take the benefits of short-term bullishness, but it will be too risky.