Bitcoin Pulls Back As Demand For Riskier Assets Declines
FOMC Minutes Put Some Pressure On Bitcoin And Other Cryptocurrencies
Bitcoin has recently made an attempt to settle below the support level at $44,000 as riskier assets found themselves under pressure after the release of FOMC Minutes.
The Fed will likely reduce its asset purchase program in 2021, which is bearish for riskier assets. Meanwhile, the safe-haven U.S. dollar rallied to yearly highs, which indicates that traders have started to prepare for the reduction of Fed’s asset purchase program.
The crypto market is not always correlated with more established markets but it cannot ignore big news. Traders are moving out of riskier positions today, and many cryptocurrencies are under pressure. Ethereum is testing the psychologically important $3000 level. Dogecoin is trying to settle below $0.30, while Shiba Inu is testing the support level at $0.000008.
It should be noted thtat while the current crypto market mood is somewhat bearish, it remains to be seen whether Bitcoin and other cryptocurrencies will remain sensitive to news from the Fed.
Bitcoin has recently tried to settle below the support level at $44,000. This support level has already been tested several times and proved its strength.
In case Bitcoin manages to settle below the support at $44,000, it will gain downside momentum and move towards the next support level which is located at the 20 EMA at $43,500.
A move below the 20 EMA will open the way to the test of the support at $42,000. If Bitcoin settles below $42,000, it will head towards the next support at $41,300. A successful test of this level will open the way to the test of the support at the 50 EMA at $40,500.
On the upside, the nearest resistance level for Bitcoin is located at $46,000. If Bitcoin moves above $46,000, it will head towards the resistance at $48,000. A successful test of this level will push Bitcoin towards the psychologically important $50,000 level.
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