Central bank pushes Bitcoin price to the downside, will BTC bounce?

Central bank pushes Bitcoin price to the downside, will BTC bounce?

The Bitcoin price is hanging on by a thread as it recovers the gains from yesterday’s trading session. Once again, macroeconomic forces appear to be taking over price action as the number one cryptocurrency by market capitalization looks into the abyss of a potential new leg.

At the time of writing, the Bitcoin price is trading at $19,077 with a loss of 5% and a gain of 1% in the last 7 days and 24 hours respectively. BTC is looking at two potential support levels in short time frames to prevent further downside.

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BTC’s price is moving sideways on the daily chart. Source: BTCUSDT Tradingview

Bitcoin price reacts bearishly to ECB interest rate hikes

Today was shaping up to be a volatile day as the chairmen of two of the world’s largest central banks, the European Central Bank (ECB) led by Cristine Lagarde and the US Federal Reserve (Fed) led by Jerome Powell, made important announcements.

The ECB announced a rate hike of 75 basis points, the largest in its history. In the coming months, the financial institution will continue to increase as they aim to “temper demand and protect against the risk of a sustained upward shift in inflation expectations.”

In addition to stopping inflation, the same goal as the US central bank, the ECB wants to slow the euro from crashing against the US dollar. In light of the current macroeconomic uncertainty and the rise in global energy, people have fled to the dollar.

This has led to a crash in the European currency, legacy financial markets, the Bitcoin price and crypto markets. Like Lagarde announced their target, the euro saw a small peak that could suggest a positive perception from the market.

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Euro reacts to the upside as ECB announces interest rate hike. Source: Holger Zschaepitz
via Twitter

Sell ​​Liquidity Increases, Can Bitcoin Overcome It?

Both Lagarde and Powell agreed that the short term suggests more pain for the financial world. Initially, the Bitcoin price reacted on the downside, but is still sitting on critical support and may bounce from $19,000.

This level and $18,600 act as key supports and bulls must maintain them to prevent further downside. As NewsBTC reported yesterday, it is imperative that bulls regain upper levels of $19,000 and north of $20,500.

However, data from Material Indicators suggests short-term headwinds as the Bitcoin order book sees an increase in ask (sell) liquidity. $19,400 seems like critical low timeframe overhead resistance with about $10 million in ask orders.

The BTC price (blue line on the chart) is seeing an increase in sell orders (yellow levels about price) that could act as short-term resistance. Source: Material indicators

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