The current Bitcoin chart
As we can see from the 4h chart, the downtrend is currently losing value. Yet, since we have not seen any strong push upwards we can expect the chart to form a channel or a range around these levels. Every single bounce from the support was only temporary and none of them had a proper volumes to support further upward move.
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This level around 20 000 dollars has a potential to hold on for a while, since it is the ATH from 2017. Speaking strictly from a historic standpoint, Bitcoin has never breached its previous ATH in the bear market. Yet, it is possible that this might not last forever and Bitcoin might dip below 20 000 USD.
4h chart of Bitcoin, Source: Author’s analysis, tradingview.com
The overall market sentiment
Not only cryptocurrency market, but also the stock market is currently bleeding. This is however not surprising, since the inflation is at record levels and Fed has to react through interest rate hikes. This is something that the markets usually do not like. And due to inflation, Fed does not have the power to try to save the markets even though they are in the correction basically ever since the year 2022 started.
If inflation remains this high the Fed cannot do any steps to save them, leaving them alone to battle with the current situation. Moreover, not only interest rate hikes, but also quantitative tightening may affect the markets. QT is the opposite of QE. While during the Covid-19 pandemic more than 120 billion dollars a month was released to the markets through QE, currently the QE has not only stopped, but it is also reversed, which means that the liquidity is sucked out of the market. This is extremely negative, when combined with all the elements affecting the markets now.
The crypto market is not in the best condition and it can remain like this for some time. With records-breaking inflation, unprecedented interest rate hikes and quantitative tightening, the markets have a lot of negative inputs to process. Unless this changes significantly, we cannot expect wonders from the crypto market.