Bitcoin (BTC) and Ethereum (ETH) have all fallen to significant resistance levels of $30,000 and $2,000, respectively. This comes as the Federal Reserve’s tightening could result in a stock market downturn and a recession, which could impact all risk assets, including cryptocurrencies.
Potential Pullback Risks Amid Recession
Despite their strong performance since the start of 2023, Bitcoin and Ethereum could face substantial pullback risks due to the recession. Bloomberg senior commodity strategist Mike McGlone observed on April 21 that the yield curve has the highest probability since 1982 of a US recession ending. However, this could potentially lead to significant pullback risks for cryptocurrencies.
According to McGlone’s tweet, “Bitcoin and Ethereum may be running into a wall of resistance at the key round number levels of $30,000 and $2,000. Our bias is bullish in the long term for the top cryptos, but an overwhelming force of the stock market going down with the Fed tightening into a recession has the potential to lower the tide for all risk assets, and Bitcoin and Ethereum are among the riskiest.”
Bitcoin Struggles to Maintain $27,000 Amid Market Downturn
On April 22, Bitcoin was barely managing to maintain $27,000 as another round of losses left bulls with little ammunition. CoinMarketCap data showed BTC just clinging to the $27,000 mark after the Wall Street trading week ended on a disappointing note.
In contrast, US equities managed modest gains, while Bitcoin continued to struggle, with analysts warning of a potential decline to $25,000. Bitcoin is currently down 10% for the week and 4% for the month of April, as per Coinglass data.
The leading cryptocurrency soared to over $30,000 for the first time since June 2022 on April 10, later reaching its highest price point of just above $31,000 on April 14. The following week saw less volatility, but the situation changed dramatically on April 19 when Bitcoin’s price plunged to $29,000. The downward trend continued, with BTC reaching its lowest price since March 28 at $27,100. At press time, Bitcoin was trading at $27,163 and Ethereum was worth $1,833.
Source: https://coinpedia.org/altcoin/expert-warns-of-massive-correction-for-bitcoin-and-ethereum-as-us-economy-teeters-on-recession/