The bitcoin price took a big slide during the night from Sunday to Monday and is currently trading at $18,500. That price brings us dangerously close to the provisional bottom of this bear market of $17,600 reached in June.
No reason to worry
For now, according to Twitter analyst TheRationalRoot, there is no reason to worry. Bitcoin is currently struggling, there is no doubt about that, but compared to previous bear markets, the price is not behaving significantly differently. Indeed, bitcoin is so far still moving within the range we can expect based on the past.
https://twitter.com/therationalroot/status/1571500524951699457
The key now is to hold the middle line as support, before shooting back above the cost basis of short-term hodlers. The absolute bottom of the bear market, the black line in the chart, has already been touched in June 2022. What we often saw in the past is that bitcoin slowly but surely went into accumulation mode after that.
So there are some exciting weeks ahead for bitcoin and it is possible that this cycle could all go a little differently. Indeed, for the first time in bitcoin's history, we are heading towards a global recession, or at least, that is very much what it looks like at the moment.
Inflation and interest rate hikes
The year 2022 is mainly characterised by the sky-high inflation we are seeing worldwide, and central banks are responding more and more aggressively. In particular, the US Federal Reserve, the world's leading central bank, has raised interest rates substantially so far. A hefty interest rate hike is also scheduled for this week.
The Federal Reserve is expected to come up with a 0.75 per cent interest rate hike on Wednesday 21 September, but a 1 per cent increase is also not out of the question. Currently, a 1 per cent hike is given a 20 per cent chance in the market. Should that 1 per cent increase materialise, it would represent the most aggressive interest rate hike since the 1980s.
https://twitter.com/therationalroot/status/1571572078037303298
The Rational Root tries to capture people's sentiment and ideas in a new poll. In it, he asks whether people expect this to be a normal cycle, meaning we are currently at or around the bottom, or whether people expect it to be different this time, due to macro conditions. The majority so far indicate that they expect us to be at or around the bottom.
https://www.indexuniverse.eu/analyst-no-panic-over-bitcoin-price/
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