No encouraging reason for changing the overall downtrend
As we can see in recent months cryptocurrency market moves in sync with the stock markets. As overall financial markets were hit by central banks' tightening policies and a risk aversion sentiment increased, this environment also prevailed in the crypto market. Fears that monetary tightening policies may lead most of the world’s largest economies into recession are putting pressure on riskier assets, such as cryptocurrencies and stocks.
After last week's 75 basis points rate hike, this week, Federal Reserve Chair Jerome Powel and some other FOMC members raised expectations for future rate hikes with their comments and speeches, stating that the Fed is determined to curb inflation even at the expense of economic growth and pains for US consumers. Future rate hikes increase global recession concerns, as they will slow down this already broken economy in many major economies, which will raise the pressures on risk assets, such as cryptocurrencies.
Besides central banks' policies, we also have other geopolitical risks in the markets that reduce interest in risky assets. Therefore, we still do not have any encouraging reason for changing the overall downtrend.
Bitcoin traded below the key $20,000 level throughout the week, dropping below the $19,200 level support and reaching $18,450 on Wednesday. If BTC declines further, support can be found at $17,420 which was last seen on 18 July 2022. On the Flip side, resistance may be encountered near $20,500, if it can pass the 20 DMA, sitting at 19,600.
