A warning is being sounded by an industry professional despite the efforts of Bitcoin (BTC) bulls to keep the New Year’s rise going strong.
The year 2023 has, up to this point, witnessed the beginning of a remarkable rebound from the depths of December.
The price activity in BTC, which has increased by 31% so far this year, has revitalized the market. On Twitter, several influential people in the cryptocurrency space have been eager to declare that crypto winter is over.
Mike McGlone, also known as the “guy behind the dashboard,” is the one who is responsible for sounding the alarm. A commentator who has become well-known in recent years for his role in popularizing Bitcoin in the financial media.
McGlone is now the Senior Macro Strategist for Bloomberg, having previously held the position of Head of Research and Strategy at ETF Securities.
It’s possible that Bitcoin (BTC) is rolling over.
The foremost financial analyst took his argument to Twitter in order to make the point that risky assets have not yet emerged from the danger zone. According to McGlone’s explanation, the primary focus of his prognosis is on the concerns surrounding the macro attitude for risky assets such as cryptocurrency.
According to McGlone, “the primary possibilities for risk assets in the first quarter appear to be either a bear-market bounce or bottoming.”
“Bitcoin may be about to turn over; the benchmark cryptocurrency is retreating from resistance as the major headwinds continue,”
The price behavior of Bitcoin over the month of February has been quite difficult. Following a retracement from the significant resistance level above $24,000, the price dropped all the way to the nearby support level at $21,750.
However, while bulls strive to consolidate their gains here, it does not appear that things will go in their favor. The feared head-and-shoulders pattern is beginning to take shape on the chart structure.
Could the Federal Reserve explain the Bitcoin resistance in February?
According to McGlone’s view, the continuous pressure of headwinds from the US Federal Reserve is likely the reason for this price behavior.
“Rising rate expectations as reflected by the Federal Futures Funds [in Q1]… but the fundamental difference: markets are lower than they were a year ago.”
He continued by saying, “Don’t oppose the Fed.”
Since the end of 2021, the market has been plagued by concerns about future rate increases; nonetheless, things have remained stable up until this point.
However, the unexpectedly dovish tone that has been coming from Jerome Powell this year has helped to calm the markets so far in 2023.
A bullish S&P 500 has been supportive of Bitcoin, and this has provided the much-needed confidence boost that the cryptocurrency required.
It is very evident that Bitcoin is currently headed toward a head-on collision with its 200-day moving average. Things are going to get difficult if it doesn’t bounce back from support any time soon.
The Federal Reserve’s publication of today’s figures may be one factor that influences prices. The CPI numbers are scheduled to be revealed at 13:30 UTC, and the BTC markets are currently poised and ready to trade on their release.
A YoY estimate of 6.2% and a core YoY estimate of 5.5% are currently being factored into market prices.
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