BTC/USD: Bitcoin Bulls Meet Resistance near $31,000, Long Positions Liquidate
- Bitcoin has been slipping downwards along with the wide crypto market over the past week.
- The downward can be largely attributed to the meeting of the Fed and their hinting at further rate hikes.
- If the sell off continues, April will become the first month this year where BTC’s price fell overall.
After a bullish rally since the start of the year, BTC has met significant resistance at the $31,000 mark, and fell under $28,000 before the weekend. As well as Bitcoin, Ethereum also faced major resistance at around the $2,100 mark – falling by more than 12% last week. It seems that the bull run of 2023 might have some obstacles to overcome if it is to continue.
Aside from the two largest cryptocurrencies facing headwinds, the total market cap of the crypto space has fallen to under $1.15tn, despite having peaked at around $1.26tn this month. In a single day last week, $253m worth of long positions were liquidated as crypto values plummeted. Analysts are also noting that crypto trading volumes are decreasing – with April exchange volumes expected to come in substantially lower than the $984bn recorded in March.
What’s causing the Bitcoin sell off?
One of the main causes of the sell off is the policy of the federal reserve. At their most recent meeting, officials hinted at the likelihood of another quarter basis point interest rate hike in May. Without a turnaround soon, April will become the first month of 2023 over which BTC logged a net drop in price.
The other factor is the fact that 2023’s rally across the crypto space is being viewed by some as premature and is being tested by those with more pessimistic outlooks for the market. The release of the UK inflation report, which showed it to be remaining extremely high, also seems to correlate to the timing of the start of the sell off. So far however, 2023 is looking more promising for the crypto market than the end of 2022.
(About Bitcoin)
Bitcoin is the original decentralized digital currency that was invented in 2008 by an unknown person or group of people using the name Satoshi Nakamoto. It operates on a decentralized peer-to-peer network, meaning that transactions can occur directly between users without the need for intermediaries like banks. Bitcoin uses cryptography to secure transactions and to control the creation of new units of the currency. Transactions are recorded on a public ledger called the blockchain, which allows anyone to verify the validity of a transaction and the ownership of bitcoins.The total supply of bitcoins is limited to 21 million, which is expected to be reached around the year 2140. Bitcoin's price is highly volatile, and it has experienced numerous boom and bust cycles over the years.