Bitcoin (BTC) may recover slightly from 24 hours ago and as a result, the fear in the market is slowly easing. Despite this, fears are still very high and there are serious concerns that we have not yet seen the worst. Fears of an economic recession are on the rise again. Meanwhile, bitcoin is consolidating again into an increasingly tight range.

Bitcoin price rises by 2%

The bitcoin price fell towards USD 20,000 yesterday morning, but still held above that. Bitcoin then rose to a high of $20,850 yesterday afternoon, but was rejected there and then plummeted rapidly.

Last night, bitcoin dipped below $20,000 twice with $19,800 as the low. The price then started to recover and shot as high as $20,600 last night.

This morning, bitcoin initially fell to USD 20,200 and then rose back to USD 20,600. At the time of writing, the BTC price is $20,500 on FTX and $19,500 on Bitvavo. This means that the BTC rate is currently about 2% in the plus.

Inflation, interest, recession and bitcoin

The direction of the bitcoin price currently strongly depends on macroeconomic developments and especially the monetary policy of the Federal Reserve, the US central bank. Fed chairman Jerome Powell said last night that further rate hikes will be “appropriate”:

“We expect continued rate hikes to be appropriate; the pace of those changes will continue to depend on incoming data and the evolving outlook for the economy.”

It may not be very clear language, but there is speculation that interest rates in the US could be twice as high by the end of the year as they are now. Meanwhile, economists fear that the Fed may have been too late to intervene and worries about a possible recession are rising again.

In addition, it appears that inflation in the United Kingdom and Canada is now at its highest in no less than 40 years. All these macroeconomic developments bode ill for investors hoping for a quick recovery for bitcoin.

Bitcoin mining difficulty drops, miners still under pressure

The so-called bitcoin mining difficulty, or difficulty, fell 2.35% last night according to data from BTC.com† However, this means that the total hash rate, or computing power, of the Bitcoin network remains high on average. Coupled with the current low price of bitcoin, this means that miners are still under considerable pressure.

Analyst company IntoTheBlock reports that since June 12, the BTC outflow from miners to exchanges has risen sharply. This morning Crypto Insiders reported that as much as 5,000 BTC had been sent to Binance from Poolin, possibly causing more selling pressure.

Bullish bitcoin on-chain data

Despite this, not everything looks negative for bitcoin. Although in yesterday’s market update we mainly bearish shared data, we now have some more bullish dates. For example, analyst Jan Wüstenfeld reports that the bitcoin balance on exchanges is still decreasing and that is probably a positive trend.

In addition, CryptoQuant CEO Ki Young Ju reports that most cycle indicators suggest a bottom for bitcoin. However, that says nothing about how long the BTC rate will consolidate here. It also doesn’t rule out bitcoin hitting an even lower price this summer.

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Disclaimer: Investing involves risks. Our analysts are not financial advisors. Always consult an advisor when making financial decisions. The information and tips provided on this website are based on our analysts’ own insights and experiences and are for educational purposes only.

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