Bitcoin (BTC) cashed in at new lows on January 7 as 2022 continues to deliver uninspiring price action.
BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView
Trader: Bitcoin Should Close Above $42,400
Data from Cointelegraph Markets Pro and TradingView showed that BTC/USD reached its lowest level since September overnight, reaching $40,938 on Bitstamp.
The pair initially rebounded at $42,000 but then renewed its decline, breaking through the floor seen in the liquidation streak in December.
Among traders, the discussion focused on a similar event, with targets including a breakdown below the September low of $30,000.
The popular Twitter trader Crypto Ed warned as part of his latest forecast: “It could drop with the wick to liquidation, below the September lows.”
At current levels, Bitcoin also threatened to disappoint trader Anbessa on the daily time frames.
Commentators have argued that the macro odds have been stacked against both bitcoin and cryptocurrencies, with headwinds coming from – among other things – events in Kazakhstan, home to an estimated 18% of bitcoin’s hash rate.
After mass internet outages across the country this week, hash rate estimates are starting to show a surprising drop of about 20 exahashes per second (EH/s) from an all-time high of 192 EH/s — triggering an exodus of Chinese miners last year.
BRRR Money Printer Won’t Work
Looking ahead, others have also remained submissive to the prospects of the cryptocurrency market thanks to the macroeconomic policy.
Among them was Arthur Hayes, the former CEO of derivatives exchange BitMEX, who referred to scheduled interest rate increases by the US Federal Reserve and cutbacks in asset purchases as spoiling the attractiveness of holders of risky assets.
In a new blog released, he wrote, easy money is drying up.
“Given the law of large numbers, a simple resumption of the previous trend in asset purchases will not cause money supply growth to accelerate abruptly and sharply. So, while risky assets will cheer — including cryptocurrencies — the best case is that asset purchases are slowly trending. towards its all-time high.
“Even if that happens, the only way the crypto markets can move higher is if the Fed runs the faucets openly, and securities flow into crypto.”
It is still unknown when the Fed will raise interest rates, while the purchase cuts have already begun.