Cryptocurrency is generally down! Bitcoin drops nearly 9% and breaks support level, may not rebound in the next 4-6 days

Bitcoin and other cryptocurrencies fell sharply on Monday because investors continued to worry about the deterioration of the macroeconomic environment, the tightening of monetary policy, and the economic slowdown caused by the Omicron variant virus.

Bitcoin fell 8.7% on Monday to around $46,000. Ether tumbled 11% to $3,700, and other cryptocurrencies performed even worse. For example, Solana fell 13% and Terra fell 14%.

At present, Bitcoin has fallen by more than 30% in 35 days, and has fallen by nearly US$23,000 since its high of approximately US$69,000 in early November. Because it has fallen below the support level, this means a further downward trend in terms of technology.

Fundstrat Global Advisors reported on Monday that: the recent trend is still bearish, and momentum has not shown proper signs of stabilizing and preparing for a rebound.

Fundstrat expects that Bitcoin's trading in the next 4 to 6 days will fall, because Bitcoin has reached a recent low of about 47,660 US dollars, and the next test point will be 41,634 US dollars.

Ether also broke through the important support level of $3,900. Fundstrat said: Breaking through $3,900 will lead to a bearish recent trend, initially falling to $3521, so it is very important for Ether to hold the support point in the recent backtest.

The weakness of cryptocurrencies may come from short-term momentum factors. Since mid-October, the supply of short-term holders of Bitcoin has increased by more than 330,000, and some of the new funds may now be flowing out. According to Coinglass data, since December 1, global exchanges have settled more than $3 billion in long positions.

Open interest in Bitcoin futures is also declining, dropping 4.1% in the past 24 hours, and the contract value is $17.2 billion. According to data from CoinShares, the inflow of funds into cryptocurrency funds has shown a downward trend. In the past week, it has fallen from US$184 million in the previous week to US$88 million, which is much lower than the US$306 million in the week ended November 29.

If you look at the meaning of settlement and outflows positively, it means that traders intend to squat low and then jump high, that is, withdraw funds first and prepare to rebound higher again. However, the point is based on the assumption that the market is broadly inclined to risk, and it may be difficult to swallow this assumption now.

More than a dozen central banks will hold meetings this week to evaluate monetary policy and interest rates. Including the Fed, the Fed is expected to hold meetings on Tuesday and Wednesday.

The market is obviously trembling about the Fed Chairman Jerome Powell (Jerome Powell) may be more hawkish. Powell may signal that the Fed will reduce the $120 billion monthly debt purchase scale earlier, which means that interest rates will also be raised earlier. Currently, it is expected that June 2022 Will begin to raise interest rates.

Technology stocks were sold on Monday due to the prospect of rising interest rates, because interest rate hikes would erode the present value of future cash flows. The bond market seems to be more worried about slowing economic growth, with the 10-year U.S. Treasury yield falling from 1.49% to 1.43%.

Cryptocurrency may be caught in the middle. As investors bet on reduced liquidity, slower economic growth, and a more severe outlook for all risky assets in 2022, the market has been hit.