The last few months have not been kind to the bulls of Bitcoin, but they have not been alone in their misery. Persistent comments from the Federal Reserve in the country have hinted towards plans of raising the interest rates in 2022, which has been causing most of the investors to look for protection in bonds that are protected from inflation.
The monetary authority has gone ahead and signaled their intention of substantially increasing the benchmark interest rate- which will gradually reduce the monthly purchase of all the debt assets.
Bitcoin Could Be In Trouble If Price Falls Lower
Although most crypto investors have believed that the digital scarcity of Bitcoin is simply a protection against inflation, this doesn’t really change its much-vaunted volatility. On the other hand, it would definitely cause the price of the asset to move in tandem with the market of risk.
A chart fully highlights the price of BTC when it has been stacked against the smaller companies in the US- listed under the Russell 2000 equity markets index. Unlike the Dow Jones Industrial Index, or the S&P 500, this benchmark usually excludes most of the tech giants. Thus, this would lead to smaller companies being considered far riskier.
However, the performance of the crypto industry over the last month didn’t scare most of the investors as the Purpose BTC ETF- based in Canada- went ahead and attracted close to $38 million worth of Bitcoin this Thursday, which has been its third-largest daily inflow till date. The fund currently holds around 31,032 BTC, which is equivalent to $1.2 billion. Now, regardless of the sentiment of the investors, the Bitcoin bulls could be facing a loss of $120 million if the price of BTC moves below the resistance zone of $36,000.
As reported by the open interest on the options expiry of Friday, Bitcoin bulls have been placing heavy bets between sums of $40,000 and $44,000.