Bitcoin (BTC) experienced a predictable drop on Wall Street on April 11 as bears led the market towards $40,000.
Bitcoin is nearing the $40,000 mark
Data from Cointelegraph Markets Pro and TradingView showed last week’s downtrend gaining steam after a disappointing weekly close on Monday.
As the new week began, the quiet weekend gave way to volatility led by falls in equities around the world.
In Asia, the Hang Seng closed down 3% on the day in Hong Kong, while the Shanghai Composite Index closed 2.6% lower. Germany’s DAX was trading down 0.77% at the time of writing, mimicking the FTSE 100 in London.
With Wall Street just getting started, attention has focused on US dollar strength, as evidenced by a repeated rise in the US Dollar Currency Index (DXY) above the 100 level on Monday.
“Looks a little overwhelmed here, not that it’s noticeable in risky assets,” Twitter commenter BC Richfield arguedindicating a potential pullback target area.
“Expect a pullback to the 99.437 area which is the previous high of the range. Hold here then we could see more blood in the water for risky assets like crypto but join the range and…”
With bitcoin firmly poised to follow stocks as they struggle through central bank tightening, sentiment was muted as BTC/USD struggled for $41,000 support.
Rejection is for #Bitcoin.
Let’s try to find support in the green zone. https://t.co/qNKK1Tu7eC
— Michaël van de Poppe (@CryptoMichNL) April 11, 2022
Tuesday’s March consumer price index (CPI) release, meanwhile, has been overturned to reveal the reality of inflationary pressures since Europe’s Russia-Ukraine war began in late February.
The conflict and its impact on supply chains, especially food, were not yet included in the CPI data, which nonetheless was already at 40-year highs.
Markets facing “massive shock”
However, crypto veterans increasingly disagreed. Indeed, instead of raising interest rates and unwinding asset purchases to stem inflation, central banks would have no choice but to continue on their current path despite rising prices.
Related: BTC Stock Correlation “Not What We Want” – 5 Things to Know About Bitcoin This Week
“A massive shock to economic markets is brewing (and very soon) that will prompt central banks around the world to aggressively reverse course in their talk of tightening,” said podcast host Preston Pysh tweeted on that day.
“The 40-year trendline in bond yields is breaking and YCC in the US is upon us.”
Pysh’s argument mirrored that of former BitMEX CEO Arthur Hayes, who in his recent blog post on the economy revealed a complete lack of confidence in the idea that the Federal Reserve in particular was genuinely trying to reduce inflation.
“As I have said many times before, the goal is not to actually fight inflation, but to appear to be fighting inflation so that domestic politicians can survive an angry populace that works more but can afford less,” he wrote.
“Central bankers need to tighten, tighten and tighten more, but not too much – because positive real interest rates would completely destroy the debt-based global economy.”
If this ends up being a silver lining for crypto, then timing was the devil. However, an initial drop in stocks due to the tightening could initially push Bitcoin significantly lower.
“The great thing about having a 24/7 market open to anyone with an internet connection is that things move fast,” Hayes added.
“I believe that by the end of Q2 in June this year, Bitcoin and Ether will have tested these levels: Bitcoin: $30,000, Ether: $2,500.”
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.
https://cointelegraph.com/news/bitcoin-keeps-falling-as-former-bitmex-ceo-gives-30k-btc-price-target-for-june Bitcoin continues to fall as former BitMEX CEO gives BTC price target of $30,000 for June