Cryptocurrency markets started the week under strong selling pressure due to sharp changes in US interest rate expectations.
In a recent analysis published by crypto market maker Wintermute, a warning was issued that if Bitcoin falls below the $75,000 level, the price could quickly retreat to the $70,000 range.
According to Wintermute analysts, Bitcoin recently failed to break above the critical 200-day moving average in its first major macroeconomic stress test. This suggests that the previous rally was largely driven by short position closures rather than new capital inflows.
On the macroeconomic front, the outlook is becoming increasingly tighter. Consumer inflation in the US is rising above expectations, while core inflation remains high. The decline in real wages is noteworthy, and the rise in the US 10-year Treasury yield to 4.58% is increasing pressure on risky assets.
Furthermore, the expectation that the new, more hawkish Fed chairman, who will take office in three weeks, may take hawkish steps in monetary policy is unsettling the markets.
A remarkable shift has also occurred in market pricing. In just five trading days, investors have moved from expecting interest rate cuts to pricing in the possibility of interest rate hikes.
The performance gap between asset classes also supports this picture. While Brent oil rose 8.6% on a weekly basis, Bitcoin fell 5.7% and Ethereum lost 10.2% of its value. Analysts note that capital is flowing into assets that thrive on inflation.
Wintermute emphasizes that the $76,000 to $78,000 range is a critical support zone for Bitcoin. While maintaining this level could boost market confidence, a drop below $75,000 and continued ETF outflows could lead to a rapid pullback to the $70,000 level.
*This is not investment advice.
