Bitcoin accumulation comes to halt as investors are cautious ahead of FOMC's next move
- The trend of Bitcoin accumulation by large wallet investors has slowed down as the asset hits $44,000.
- As accumulation hits a plateau, proponents argue that Bitcoin could take longer to rebound as crypto winter arrives.
- Investors are cautious, anticipating the Federal Open Market Committee's decision on a rate hike.
- Analysts believe Bitcoin price is stuck between two significant levels between $38,000 and $50,000.
Bitcoin whales have halted their accumulation of the asset. Analysts believe the Bitcoin price rally could halt if the crypto winter begins.
Bitcoin could take long to rebound with the onset of crypto winter
Analysts believe that Bitcoin's price slump could last longer than anticipated. Investors believe that Bitcoin's recent price drop could be a sign of crypto winter based on historical data. Bitcoin's correlation with US stocks has increased consistently.
US stock indexes have dropped 10% from their highs, and Bitcoin's relatively high correlation implies that a recovery could be delayed. Bitcoin price suffered a lengthy drawdown from its all-time high.
Accumulation by large wallet investors is considered a key indicator of the Bitcoin price trend. Whales have slowed down and stopped scooping up BTC; proponents believe this indicates an upcoming bear market in Bitcoin.
The Federal Open Market Committee's latest minutes reveal that the US Federal Reserve could soon implement its first rate hike. Their objective is to lower the inflation rate. Bitcoin has been considered a hedge against inflation for the past few years.
A drop in inflation could result in capital outflow from Bitcoin and a subsequent drop in the overall crypto market capitalization. Steve Sosnick, the chief strategist at Interactive Brokers LLC, believes that the Federal Reserve has signaled a rate hike to curb inflation, and this could steer Bitcoin towards a difficult path.
Sosnick told Bloomberg,
It will require more patience. I don't see the same type of circumstances where money is just going to flood in the way we saw before.
Analysts have evaluated the Bitcoin price trend and noted that bulls are attempting a breakout; the target for BTC is $50,000. Analysts argued that short-sellers have awaited a plunge in Bitcoin price since last week, and it is likely that BTC enjoys a bull market.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
