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Should I buy Bitcoin now?Should I buy Bitcoin now?
Bitcoin price has had a tough performance in 2022 as concerns about high interest…
The post Should I buy Bitcoin now? appeared first on CoinJournal.
Bitcoin price has had a tough performance in 2022 as concerns about high interest rates converge with heightened geopolitical, inflation, and drought risks. After soaring to an all-time high of near $70,000 in 2021, Bitcoin slipped to a low of $17,470 this year. As a result, the total market cap of all cryptocurrencies dropped from over $3 trillion to less than $1 trillion.
Federal Reserve risks
Bitcoin price has crashed hard this year simply because of the Federal Reserve. After being wrong on inflation in 2021, the Fed embarked on its most aggressive policy on record. It decided to start a quantitative tightening policy in a bid to reduce the amount of money in circulation.
At the same time, the Federal Reserve decided to hike interest rates. In the first eight months of the year, the bank hiked interest rates by 225 basis points. And in recent statements, officials warned that more rate hikes were necessary until signs of sustained inflation drop were seen.
Historically, Bitcoin price tends to underperform in a period when the Fed is extremely hawkish. The same is true for other types of assets like stocks. Indeed, most American indices like Dow Jones and S&P 500 have dropped by over 10% this year.
Bitcoin price also dropped because of falling interest among retail traders. This is evidenced by the overall weak financial results and falling volume by leading companies like Coinbase, OKX, and Binance.
As you recall, 2021 was a great year for American retail traders who had accumulated large savings as they worked from home. At the same time, the Federal government provided trillions in stimulus, including stimulus checks. Most of these funds went to cryptocurrencies.
As a result, on-chain data shows that the volume of Bitcoin transactions has been in a strong downward trend lately.
Where to buy Bitcoin now
Binance is one of the largest cryptocurrency exchanges in the world. It is better suited to more experienced investors and it offers a large number of cryptocurrencies to choose from, at over 600.
Binance is also known for having low trading fees and a multiple of trading options that its users can benefit from, such as; peer-to-peer trading, margin trading and spot trading.
Coinbase is a global cryptocurrency exchange. Its platform is well designed for beginner investors and it offers a wide range of coins, as it has over 100 to choose from.
Coinbase has high level security built into the platform, a range of diverse features to use and it offers its users options for storing their crypto, such as being able to store coins on the Coinbase exchange.
Bitcoin price prediction
The weekly chart is a good place to start when determining whether Bitcoin is a good investment now. As shown below. The chart reveals that BTC price formed a double-top pattern at around 64,000. The neckline of this pattern was at 28,397. In price action analysis, a double-top pattern is usually a bearish sign.
At the same time, the coin has moved below the 25-week and 50-week moving averages. Therefore, I suspect that Bitcoin will continue falling as sellers target the next reference level at $12,364. As such, I would not recommend buying Bitcoin at this moment. Besides, the Fed is still committed to continuing its aggressive policy.
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