After seeing $50,600 on the Binance exchange today, Bitcoin price dropped as low as $46,600, erasing $4,000. It looks like crypto is gearing up for this week’s FOMC meeting. BTC, altcoins and stocks have been selling hard as pressure builds ahead of this week’s FOMC meeting and the possibility of the Fed stepping up tapering.
Bitcoin (BTC) bulls are on the defensive once again after the breakout momentum that drove the price above $50,000 over the weekend evaporated and pulled the price below $47,000. Analysts say the slight pullback in equities and the upcoming Federal Open Market Committee (FOMC) meeting are the main reasons for the December 13 pullback, with some suggesting a revisit to the lows of $42,000 could be in the cards.
we too cryptocoin.com We took a look at what analysts have to say about the current Bitcoin price action and what they can expect in the short term for our readers.
Fed’s tapering talks put pressure on the market
As highlighted in a recent report from Delphi Digital, the current headwinds BTC is facing are heavily influenced by regulatory issues in the US. The recent tightening by global policy makers and the tapering of the Fed caused the markets to reprice. Delphi Digital comments:
BTC is one of the worst-performing assets compared to traditional asset classes since the November FOMC meeting, losing around 20% of its value last month.
While this latest drop tested the will of many traders who hoped it was just another jolt before the price rallied, crypto analyst and nicknamed Twitter user CryptoCapo gave some hope after posting the chart below comparing the current price action to the price drop seen in September:
These two fixes are very similar. Same 3 wave motion pattern. Same bottom formation (3 touches). Same funding + premium negative rates. The same hidden downtrend before the last leg goes down.
“For a reversal, a bullish divergence below $46,500 is needed”
“Bitcoin, the market drops as resistances are rejected,” said analyst Michaël van de Poppe, giving more information on the price action for BTC and posting the chart below:
In my view, we are looking for a bullish divergence to be formed below the $46.5k area for a reversal to be possible.
This price action for Bitcoin is “nothing out of the ordinary”
A final word of assurance was provided by market analyst and pseudonymous Twitter user Rekt Capital, who posted the graph below:
BTC’s bearish wick below the red weekly support area has occurred multiple times in the past (orange circles).
Rekt Capital stated that this latest drop is normal and not a major concern in the long run:
This kind of downward volatility is not unusual at these price levels.
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