Bitcoin Price Drops to $43,700 After Fed Minutes Reaffirm Rate Hike Plan

Bitcoin ( BTC ) and the broader cryptocurrency market fell as stocks retreated by the close, after minutes of the Federal Reserve's December FOMC meeting showed the regulator was committed to reducing its balance sheet and raising interest rates in 2022.

As the stock market corrected, the price of Bitcoin fell below $44,000, and in less than an hour, the liquidation volume of Bitcoin reached $222 million.

After oscillating around support at $46,000 over the past few days, bitcoin suffered a wave of sell-off that dragged the price to an intraday low of $43,717, according to data from Cointelegraph Markets Pro and TradingView.

As things stand, the Fed is widely expected to begin raising its benchmark interest rate in March, "which would mean that balance sheet reductions could begin before the summer."

Here's what cryptocurrency analysts have to say about BTC's recent Bitcoin price drop, and what the next few weeks may hold as the Fed's easy money policy ends and interest rates begin to rise.

Surrender trade looms below $44k

The Jan. 5 pullback was provided by cryptocurrency analyst and anonymous Twitter user Rekt Capital, who posted the chart below, emphasizing that “this Bitcoin range has many similarities to May 2021.”

sekt Capital says:

“Both see BTC consolidating within two bullish EMAs (i.e. green 21-week and blue 50-week EMA). If BTC is to repeat history, a capitulation event could occur when BTC briefly drifts below the blue 50 EMA. "

BTC needs to reclaim $46,000

Taking a deeper look at May's price action, analyst and Cointelegraph contributor Michaël van de Poppe has published the chart below detailing how BTC performed during the last sharp market correction.

van de Poppe said:

“The scenario of Bitcoin falling below $46,000 is happening here. Now the question is, will we stop here and bring liquidity back above $46,000? In this case, the bottom is already in.”

If the price fails to breach $46,000, the market could enter a prolonged bear market that could see BTC pull back to the low $30,000s.

The following chart, posted by options trader and anonymous Twitter user Nunya Bizniz, succinctly illustrates what the market is currently facing.

Nunya Bizniz says:

“BTC Monthly Data: Very Bad Below Current RSI. This Time?”

At present, the overall cryptocurrency market value is 2.123 trillion US dollars, and the dominance rate of Bitcoin is 39.4%.