Cryptocurrency Rally Fizzles amid Inflationary Concerns
- Bitcoin (BTC) drops along with top stock indexes as spot trading volume remain sluggish.
- BTC’s relief rally seems temporary after major central banks declare plans to fight high inflation.
- Technicals suggest a possible brief bounce for BTC, though sellers dominate.
Top Prices
- Bitcoin – $47,683 (-2.3%)
- Ether – $3,981 (-1.54%)
BTC’s relief rally after the United States Fed officials announced the acceleration of plans to extract the COVID stimulus efforts seemed short-lived, as the leading crypto plunged under $48,000 before Thursday ended.
The price fall came after top United States stock indexes dropped as top central banks in Europe wanted to fight high inflation. Dow Jones, S&P 500, and NASDAQ Composite plunged by more than 2%.
OANDA senior market analyst Edward Moya wrote that BTC and Big Tech encounter punishment today as market players reallocate a portion of their profitable and risky bets. He added that the cryptocurrency spectrum is witnessing repositioning, translating to unwanted selling momentum, though the long- and mid-term picture remains unaltered. Meanwhile, BTC’s spot trading volume in top centralized exchanges remained low during yesterday’s sessions.
Altcoins declined also. Ethereum plummeted under $4,000 once more, while Thursday’s winners, including Avalanche and Solana, stayed in the red at this publication.
Technical Outlook
Bitcoin stills maintain support beyond the $46,000 mark, around the 200-d MA. The digital coin might witness a slight price bounce to $55K if market participants react to the oversold conditions on the price charts.
Price momentum shifted to positive on the chart. That is since October, which led to a recovery. However, the upsurge slows on the weekly price chart this time. That means BTC is in for limited uptrends, eyeing the $55,000 – $60,000 range.
The Relative Strength Index remains oversold with weak buying. Though Bitcoin can witness a brief bounce, sellers remain in control. Furthermore, crypto requires enough momentum to overcome near-term resistances.
While most tokens follow Bitcoin’s price movements, most alts might see slight rallies before slowing down. Meanwhile, Ethereum needs a move above $4,000 to rescue the leading alt from downtrends.
Stay tuned for the latest crypto markets updates.
