By Marco Oehrl
Bitcoin spent more than 24 hours consolidating below a key resistance zone. Yesterday afternoon, the bears finally took over. The BTC/USD fell from its daily high of almost $32,000 to last night's low of $29,350, a drop of about 8%. On Thursday morning, the cryptocurrency remained below the key threshold of $30,000.
In the end, risk aversion has prevailed, as feared. This was also the case in stock markets in Europe and the USA. The comments from Jamie Dimon, the head of JP Morgan who warned of an "economic hurricane" heading our way, also contributed to this:
"The sun is still shining, things are going well, everyone believes that the Fed is getting everything under control:
But the hurricane is out there and it's coming our way. We just don't know if it's a minor one or a superstorm Sandy ... Better get ready for something."
Dimon also recalls that never before has there been so much excess liquidity in the market. Then there is the Russia-Ukraine war, which could have consequences that no one can assess at this point:
"There has never been a QT like this before. So we are dealing with something that will be written about in history books 50 years from now.
The central banks have no choice because there is too much liquidity in the system ... They have to withdraw some of the liquidity in order to stop speculation, to bring down real estate prices and so on."
Bitcoin technical price levels
Bitcoin failed to hold above the 23.6% Fibo retracement of $31,621. The downward movement caused it to fall below the psychological level of $30,000 and if it closes below that by the end of today, the recent low of $26,500 will inevitably be targeted.
Only a sustained return above the two resistances listed above would give the bulls a glimmer of hope because then, further gains towards the 38.2% Fibo retracement of $34,789 would be possible.