Jump to content

Bitcoin Price Forecast: BTC/USD Faces 2021 Low as Risk Assets Plummet

Recommended Posts


  • Bitcoin sinks alongside risk assets after US CPI beats forecast
  • China’s credit growth in focus as new yuan loans data nears
  • BTC/USD threatening 2021 low as crypto fear exponentiates

Why Did Bitcoin and Other Cryptos Drop Today? It's Not Just El Salvador. |  Barron's


A risk-off move from overnight is likely to extend into today’s Asia-Pacific session. US stocks closed in the red after traders digested the latest inflation data out of the United States. The US consumer price index (CPI) crossed the wires at 8.3% versus the 8.1% Bloomberg consensus forecast. While that was lower than the prior month’s 8.5% print, it reignited inflation woes. Bitcoin fell over 9%, nearly breaching its 2021 low at 27,734.00. That brought the cryptocurrency’s monthly loss to over 23%, a stunning move considering April’s 17.31% drop.

Short-term US breakeven rates rose following the CPI data, with the 2-year breakeven rising nearly 20-basis points, although it remains below 4%. That helped push real yields lower, helping to boost gold and silver prices. The tailwind from the move in real yields came just in time for XAU, given that the metal was trading at critical support. Other safe-haven assets also benefited as equity prices fell. The Japanese Yen managed to gain versus a US Dollar that rose against the Euro and the British Pound. That pushed the DXY index slightly higher.

The stronger Dollar helped to push iron ore prices lower, dragging on the commodity-sensitive Australian Dollar. China’s battle with Covid under its “Zero-Covid” policy has pressured industrial metals as factories across the Asian economy run at reduced capacity. A report from the China Passenger Car Association, released Tuesday, stated that production among five auto companies in Shanghai dropped by 75% in April from the month prior. Although not as severe, other auto manufacturers elsewhere in China saw significant production drops.

Traders are on watch for a credit update out of China. New Yuan loans data for April may cross the wires as soon as today. Analysts see new loans crossing the wires at 1.53 trillion, according to a Bloomberg survey. That would be nearly half the amount of new loans created in March, representing a sharp contraction in the country’s credit creation. A softer-than-expected figure may weaken sentiment further, especially given that loans would be falling severely at a time when the PBOC and Beijing are bolstering support for the economy.


Bitcoin prices dropped overnight, nearly touching the 2021 low before trimming some losses. The bearish pressure may grow further now that prices are below the psychological 30,000 level. The Relative Strength Index (RSI) is in oversold territory and moving lower, reflecting the recent bout of extreme weakness. The 2021 low at 27,734 will likely remain pivotal, with a drop below the level perhaps bringing additional weakness.


Bitcoin Price Forecast: BTC/USD Faces 2021 Low as Risk Assets Plummet

Chart created with TradingView

--- Written by Thomas Westwater, Analyst for DailyFX.com. 12th May 2022

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
    • Total Posts
    • Total Members
    • Most Online
      10/06/21 10:53

    Newest Member
    Joined 06/06/23 01:09
  • Posts

    • Tech Stock Market Report: Apple (AAPL),Tesla (TSLA), Amazon (AMZN), Nvidia (NVDA), Microsoft MSFT, Meta Platforms, Netflix (NFLX), Alphabet GOOGL  Stock Market Summary: Tech stocks remain in bullish trend.  Elliott Wave Analysis: APPL is in Wave (a) of an (a) (b) (c) Wave iv) correction, this will affect ETFs and the Nasdaq 100. This correction should be completed at the end of the next trading session. The tech stocks in this video are fine in their bullish trend structures. Trading Strategy: Longer term traders can simply hold as the main trend structure as a bullish trend is in place. Video Chapters 00:00 Apple (AAPL) 09:35 Amazon (AMZN) 10:54 NVIDIA (NVDA) 15:44 Meta Platforms (META) 17:41 Netflix (NFLX)  19:20 Alphabet (GOOGL) 21:33 Microsoft (MSFT) 25:16 Tesla (TSLA) 31:35 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com   
    • Look Ahead to 6/6/23: RBA interest rate decision; UK retail sales; British American Tobacco Australia’s central bank is likely to keep rates at 3.85% in June, but may raise again soon as inflation remains uncomfortably high. More data is likely to show cost of living pressures continue to weigh on the British consumer. Plus, watch out for consumption trends and earnings from British American Tobacco. Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Monday 05 June 2023           
    • We would like to go short silver for technical reasons and do so at $23.58 with a stop-loss at $24.03 and a downside target at $22.15. Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Monday 05 June 2023        
  • Create New...