Bitcoin Blindsided By Ban Warning From Dalio, BTC Near Key Support

Well, at least it was a really strong first 2.5 months of Q1.

For the past 12 days, crypto-currencies have been on their back foot after Bitcoin set yet another fresh all-time-high on March 13th. This time, BTC pushed above 60k, albeit temporarily, but the retreat from those highs has so far been brought upon by a consistent print of lower-lows and lower-highs. At this point, the pullback has run by as much as -18.5%, but this isn’t even the largest pullback in BTC/USD during Q1. That took place in the last week of February when Bitcoin was off by 25% in a one-week-period.

Perhaps thickening the drama currently is the broader question around risk assets. As quarter-end nears and as the US economy appears to be on firmer footing, expectations have begun to arise that the Fed may not be able to sit on this super-dovish policy stance for as long as they’d hoped. With price pressures showing in key commodity markets like Lumber, Tin or Copper, the expectation is that this will eventually filter into the CPI and PCE data that the Fed looks at when making policy decisions. This explains why rates markets have run so hard in Q1, with yields on the 10-year Treasury note jumping by as much as 90% during the period.

And more recently, even as the Fed has continued to transmit in multiple ways both their expectation and desire to keep policy super dovish until absolutely necessary, markets have continued to coagulate, with tech stocks showing pressure to go along with that rise in yields. And, more recently, that’s begun to hit cryptocurrencies as indicated by this -18% slide in Bitcoin in less than 2 weeks.

As looked at on Tuesday, Bitcoin started the week with a test of trend support. But, that support couldn’t hold the pressure of sellers and prices slinked down to the ‘s2’ level looked at in that same article. A bounce from ‘s2’ found resistance at ‘s1,’ at which point another driver came into the fray in the form of some comments from famed Hedge Fund Manager, Ray Dalio.

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