BTC/USD Analysis – January 12, 2022

Bitcoin Price Prediction

The BTC/USD pair closed at $42,743.0 after placing a high of $43,113.0 and a low of $41,287.0. BTC/USD found some support and turned upside down with a minor correction. On Tuesday, Federal Reserve Chairman Jerome Powell discussed the possibility of the central bank issuing CBDC during his re-nomination hearing before the Senate.

Powell appeared to have reversed one of his previous positions on the relationship between CBDCs and stable coins. He suggested that both could co-exist without the former replacing the latter. Powell also suggested that he had no intention of banning cryptocurrencies outright as he was setting the U.S. regulatory approach apart from China’s. This provided some support to the declining prices of the BTC/USD on Tuesday.

On the other hand, billionaire fund manager Jeff Gundlach warned about the recession happening later this year. The CEO of Doubleline Capital, with assets under management worth $137 billion, is also sometimes referred to as the "Bond King" after appearing on Barron’s cover in 2011 as the "New Bond King." Institutional investors named him Money Manager of the Year in 2013, and Bloomberg Markets named him one of "the Fifty Most Influential" in 2012, 2015, and 2016. His net worth is currently $2.2 billion, according to Forbes.

He warned that bond markets were already showing enough of the recession indicators that in 2023 there would be a recession. He also said that the Fed would have to increase interest rates four times this year, after which recession signals would be more visible. He said there was undoubtedly a non-zero probability of a recession in the latter part of 2022.

On Monday, the CEO of JP Morgan, Jamie Dimon, said that the Fed might have to increase the interest rate more than four times this year as inflation was worse than people thought. He even said that he would be surprised if the Fed only raised interest rates four times this year.

Gundlach stressed that cryptocurrency was for speculators, and those who were thinking of buying BTC at this moment should wait for it to decline to $25,000, and then they should buy it. This prediction added further weight to BTC prices on Tuesday.

Furthermore, the U.S. basketball players Klay Thompson and Andre Iguodala have also revealed that they want to get half of their salary in cryptocurrency. The NBS stars have announced their pay check plans on Twitter and showed that they would be receiving part of their salaries in Bitcoin. This report might have supported the declining prices of BTCUSD on Tuesday.

BTC/USD Intraday Technical Levels

Support Resistance

41649.0 43475.0

40555.0 44207.0

39823.0 45301.0

Pivot Point: 42381.0

BTC/USD - Technical Outlook

Bitcoin has built a support base and has risen beyond the $42,000 barrier level. BTC even traded above $42,500 and the 100 hourly simple moving average to enter the green zone. The increasing trend accelerated, and the price surpassed the $43,000 mark. A high near $43,127 has been achieved, and the price is now reversing gains. It was trading under the $42,800 support level. The price fell below the 23.6 percent Fib retracement level of the upward run from the swing low of $41,315 to the high of $43,127.

If bitcoin does not return over $43,000, it may begin a new slide. On the downside, there is immediate support near $42,500. The first significant support is near $42,200, as is the bullish trend line. The trend line is close to the 50 percent Fib retracement level of the upward move from the swing low of $41,315 to the high of $43,127. If the price breaks below the trend line support, it may move towards the $41,800 level and the 100 hourly SMA. Any further losses might drive the price down to the $40,500 support level in the next sessions.