Overnight, North America's largest bitcoin conference, Bitcoin 2022, kicked off in Miami just nine days after Bitcoin tagged fresh year to date highs for 2022.
Despite the high degree of crypto hype and fanfare that the event will generate in the coming days, the event's opening day coincided with Bitcoin experiencing its largest one day fall in a month, closing over 5% lower near $43,200.
As we frequently note, Bitcoin is a risk asset, tightly linked to the performance of U.S. equities and, in particular, the Nasdaq. The link between Bitcoin and the Nasdaq link is cryptocurrencies provide access to digital technology, and some high-profile stocks on the Nasdaq hold a good chunk of Bitcoin on their balance sheet.
Additionally, Bitcoin and Nasdaq have benefitted from an extended period of ultra-easy monetary policy and excessive liquidity. Both of which are set to be reduced rapidly as central banks move aggressively to tame inflation.
The minutes from the March FOMC meeting released overnight indicate that one or more 50bp hikes "could be appropriate" as part of 225bp of rate hikes priced into the interest rate market before year-end. Both Bitcoin and the Nasdaq slumped.
Turning to the charts, in an article on Bitcoin last week, here we noted the importance of the 200 day moving at $48,300 for the future direction of Bitcoin. As it turned out, Bitcoin tagged the 200-day moving average before reversing lower.
After losing critical support at $45,000 overnight, it has left the rally to the $48,235 high with a distinctly corrective appearance and the expectation that a test of range lows at $36/33k will be forthcoming.
Source Tradingview. The figures stated are as of April 7, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
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