The crypto market has been on the back foot since November. For Bitcoin (BTC) and a number of other majors, including Ethereum (ETH), the pullback comes after having struck new all-time highs in late 2021.
Bitcoin (BTC) and Key Crypto Market Drivers
It was a week to forget for Bitcoin (BTC) and the broader crypto market. In the week ending 9th January, Bitcoin (BTC) slid by 11.51% to end the week at $41,856. It was Bitcoin’s (BTC) largest weekly decline since a 13.74% slide in the final week of November. More significantly, the loss was the 6th in 8-weeks.
For the Bitcoin (BTC), avoiding a 7th consecutive day in the red and sub-$40,000 were key. The last time Bitcoin (BTC) fell for 7 consecutive days was back in 2018.
Things were not much better elsewhere, with Ethereum (ETH) tumbling by 17.79% to end the week at sub-$3,200 levels.
For the crypto market, the start of the year sell-off left the crypto market cap down $1,964bn. Back in November, before the current reversal, the market cap had hit a high $3,009bn.
The key driver in the week included more hawkish than anticipated FOMC meeting minutes. Bitcoin (BTC) fell by 2.7% in the hour following the release of the minutes. Pressuring Bitcoin (BTC) and the broader market in recent weeks, however, continues to be a pickup in regulator chatter and activity. With news hitting the wires of a U.S Congress sub-committee preparing to hear on the effects of cryptos and Bitcoin (BTC) mining on the environment, downside risks remain.
Key Drivers for the Week Ahead
While it has been a more positive start to the week, it could be another testy week ahead. On the U.S economic calendar, inflation figures for December will likely have an impact on the crypto market. A further pickup in inflationary pressure would price in a March rate hike, which would be crypto market negative.
On the monetary policy front, FED Chair Powell is due to give testimony on Tuesday, which will be another test. Hawkish chatter will also be considered crypto market negative.
Looking at regulatory news, any updates on the SEC lawsuit against Ripple’s Lab (XRP) will need monitoring. We will also need to look out for chatter from Capitol Hill and from regulators in key jurisdictions.
Bitcoin (BTC) Price Action
For the week ahead, Bitcoin (BTC) would need to move back through to $43,500 levels to shift sentiment. A move through this week’s $43,361 pivot would bring $45,000 levels into play. The week’s first major resistance level sits at $46,167.
Failure to break back through to $43,500 levels would leave Bitcoin (BTC) in the hands of the bears for another week. A fall through last week’s key support level at $40,500 would bring sub-$40,000 into play for the first time since September 2021. The week’s first major support level sits at $39,051.
This article was originally posted on FX Empire