Bitcoin (BTC/USD) Outlook:
- Bitcoin prices drop below 50-day MA (moving average), holding as resistance above $23,000.
- BTC/USD loses traction, leaving prices vulnerable around $22,000.
- Cryptocurrency lacks clarity as investors focus on Fed Chair, Jerome Powell’s congressional statement and clues on additional rate hikes.
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Bitcoin prices are currently on track for their third, consecutive week of losses, pushing BTC/USD below $22,000. With Fed Chair, Jerome Powell suggesting that interest rates may continue to rise in the foreseeable future, BTC/USD broke prior resistance, reaching a low of $21,858.
As the semiannual monetary policy report continues to influence market sentiment, both fundamental and technical factors have contributed to driving price action.
For major cryptocurrency, higher interest rates have a negative influence on the risk assets, which do not yield any interest from holding the coins/tokens.
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With the Federal Reserve continuing their congressional commentary which will set the narrative for the March FOMC meeting, BTC/USD remains under pressure.
While Silvergate Capital becomes the latest victim of FTX contagion, a drop below the 50-day MA (moving average) and below the September high (at $22,781) has exacerbated the downward move.
Bitcoin (BTC/USD) Daily Chart
Chart prepared by Tammy Da Costa using TradingView
With the CCI (commodity channel index) falling into negative terrain, the technical indicator suggests that Bitcoin may be oversold. However, as prices hover around the next level of psychological support around $22,000, a break below could leave prices vulnerable to further declines. The February low of $21,376 is the next barrier of support, with a break below bringing the $20k back into play.
On the upside, a move above $22,000 and above the September high could drive BTC higher, bringing the next level of major resistance into light at $24,000.
— Written by Tammy Da Costa, Analyst for DailyFX.com
Contact and follow Tammy on Twitter: @Tams707
