During the Covid-19 global pandemic, Bitcoin skyrocketed to its ATH of around $69k. Global markets were closed to minimize the spread of the contagious pandemic. In a bid to bolster struggling economies, most governments ended up printing more money, as observed in the United States, which offered several fiscal stimuli in trillions of dollars.
As the Covid related constraints reduce exponentially worldwide, central banks are working to counter the high inflation by raising interest rates. For instance,
“There’s still some distance for Japan to see inflation sustainably and stably meet the BOJ’s 2% target. Big improvements must be made in Japan’s trend inflation for the BOJ to shift towards monetary tightening,” incoming Bank of Japan Governor Kazuo Ueda said on Monday.
In Europe, ECB president Christine Lagarde confirmed that the EU would continue to raise interest rates until the inflation returns to 2 percent.
Consequently, economists forecast Bitcoin price is headed for the worst in the coming quarters.
Bitcoin Price Analysis
Bitcoin price rallied approximately 42 percent in January, but the momentum has since faded after gaining just 2 percent in the past four weeks. Following the recent Bitcoin price correction, analysts believe the bulls must hold on to this crucial level to secure a further rally. Otherwise, the asset could be forming a head and shoulder pattern on the daily time frame, which depicts an imminent correction.
The potential risk of Bitcoin price retesting last year’s bottom has more traders taking profits and exiting at a high rate. According to on-chain firm Santiment, more Bitcoin traders are selling at a loss than a profit.