Bitcoin maintains its crab-like price action as it continues to move sideways in lower and higher timeframes. The general sentiment in the market briefly turned bullish during today’s trade session, but BTC proceeded to return to its critical support area.
Related Reading | Bitcoin Observes Longest Stretch Of Extreme Fear Since April 2020
At the time of writing, BTC’s price trades at $29,700 with a 7% loss in the last 24-hours. Before it retested these lows, Bitcoin was rejected above $32,000 and appeared to be heading to the mid-area of its current levels.
The first crypto by market cap could react to the downside price action on traditional finances. As NewsBTC has been reporting, Bitcoin presents a high correlation with the S&P 500 and particularly higher with the Nasdaq 100 Index.
The latter was rejected at a critical level and is trending to the downside since the start of 2022. This reaction was generated by the U.S. Federal Reserve (FED) and the start of their Quantitative Tightening (QT) program.
Opposite to the Quantitative Easing (QE), when the FED buys assets and its balance sheet increases, QT will make the financial institution sell $1.1 million of assets in global markets every minute, according to an analysis by CoinBeast Media.
As a consequence, global markets, including the crypto industry, could experience more downside pressure. QT might not directly impact the industry, but it will play a key role in global liquidity, and investors’ risk tolerance, and will contribute to the conditions that could prevent Bitcoin from reclaiming new highs.
The FED has over $8.5 trillion in assets on its balance sheet. As CoinBeast explained, the last time the FED began its QT the financial institution sold less than $1 trillion of its assets.
This resulted in a 3-week crash in the stock market which recorded a 22% loss over that period. The report added:
This created a dollar shortage…
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