It was a particularly choppy day for Bitcoin (BTC) and the broader crypto market on Monday. Following last week’s heavy losses, market jitters ahead of key events in the week ahead continued to weigh. This week, the markets are looking towards FED Chair Powell testimony later today and U.S inflation figures due out tomorrow.
On Monday, news of Goldman Sachs projecting 4 rate hikes by the FED sent the crypto markets deep into the red. Bitcoin (BTC) tumbled to sub-$40,000 levels for the first time since September before finding support.
Yesterday, we had looked at the Bitcoin Fear & Greed Index, which currently sits in the deep red at 23/100. Any move towards 30 levels, to signal a Bitcoin (BTC) rebound, hinges on Powell’s testimony today and inflation figures tomorrow.
A continued spike in U.S inflation will likely force the FED to take a more aggressive stance on policy to curb price pressures. The markets will be looking for guidance from the FED Chair today.
Bitcoin (BTC) Price Action
On Monday, Bitcoin (BTC) ended the day down by 0.02% to $41,847. Earlier in the day, Bitcoin (BTC) had fallen to an intraday low $39,673 before briefly revisiting $42,000 levels. Support at around the $40,000 level was key, with Bitcoin (BTC) spending a matter of minutes at the sub-$40,000 level.
Investor optimism of a bullish year ahead supported the rebound, which was aligned with the NASDAQ recovery from the red.
For the Day Ahead
Ahead of FED Chair Powell’s testimony, ECB President Lagarde is scheduled to speak today. In stark contrast to the FED, the ECB has stood by its view that the spike in consumer prices is transitory. The markets will be looking for any shift in view that could test support for riskier assets early in the day.
Ultimately, however, it will be FED Chair Powell’s testimony to lawmakers that will be key for the markets today.
For Bitcoin (BTC), another fall to sub-$40,000 levels would test support once more. A particularly hawkish FED Chair would likely see a Bitcoin (BTC) pullback through yesterday’s low $39,668 before buying opportunities present themselves.
At the time of writing, Bitcoin (BTC) was down by 0.08% to $41,799.