Why the Bitcoin Price Rally is Stalling on Mixed Rates and Growth Outlook, DOJ Action – But Will Climb Again
The bitcoin price is up 0.4% at $20,910, recovering somewhat from a $1,000 plunge after a crypto exchange co-founder was arrested on Wednesday, and weak US data pointed to an economic hard landing.
Although there was good news on wholesale inflation in the US yesterday, the shock retail sales figures reminded market participants that a recession is coming, if not already here.
That, combined with weak factory output data, capped off a week that sees US manufacturing
Slowing growth is bad for stocks – and that has rubbed off on crypto today. The S&P 500 is down 1% at 3,889 and the Nasdaq off 1.08% to trade at 10,836.
Bitcoin and all other crypto assets have been highly correlated to other risk assets such as stocks over the past 12 months, so what happens in equities spills over into crypto.
The bellwether crypto asset is currently battling in an area of resistance it can break free from at around $22,500 (see chart below).
Next up is the $30k region then an even stronger area of resistance between $34.7k and $48.8k.
But we may be getting ahead of ourselves, as it is still not clear whether the bitcoin rally is for real.
For now, though, the bitcoin price is firmly above the 200-day moving average for the first time since December 2021, after briefly touching the MA200 in March last year.
As if all that wasn't enough for markets to worry about, yesterday brought the news that crypto lender Genesis was preparing for bankruptcy and Digital Currency Group, its owner, was suspending its dividend.
Then today the US debt ceiling was hit, forcing the Treasury to use so-called special measures to avoid a default.
Elsewhere, he European Central Bank (ECB) signalled it would be staying the course on raising interest rates, regardless of
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