Bears punch holes in Bitcoin price technical structure amid a glaring recession in the UK
- Bitcoin price rejected from $19,300; risks retesting support at $18,800.
- Bank of England hikes interest rates to a 14-year high of 2.25%, confirming recession in the UK.
- Hopes for a Bitcoin price recovery dwindle as the IOMAP highlights robust resistance zones toward $22,000.
Bitcoin price faces numerous external forces that keep making recovery a daunting task. The United States FOMC (Federal Open Markets Committee) raised interest rates by 0.75% on Wednesday, a move tailored toward combating inflation.
Before market participants got used to the spike, the Bank of England (BoE) warned of a recession in the United Kingdom. A recovery across the crypto market will likely stay on hold unless investors stop waiting for a floor price in favor of long positions.
The UK is in recession, but it’s not the only country
The Bank of England has raised interest rates by 0.5% to a 14-year high of 2.25% amid an energy crisis ahead of the winter. Bigger increases may follow in November with the sole aim of bringing inflation under control.
Although a recession may have started in the UK, BoE refrained from taking extreme measures like the US Federal Reserve, which has consistently raised interest rates by 0.75%.
The BoE forecasts a 0.1% drop in its GDP (Gross Domestic Product) this quarter, which could mean a recession is inevitable. However, a government spokesperson pointed out that “the UK is not alone in facing slow growth, with Putin’s illegal invasion of Ukraine and weaponization of energy presenting a global challenge for economies across the world.”
The state of Bitcoin price in a looming global recession
The United States recorded two-quarters of negative economic growth in 2022, while Germany’s Deutsche Bank forecasts -3.5% economic growth in 2023. On the other hand, Bitcoin price is down 72.6% from its all-time high of $69,044. Investors have been hoping for a price turnaround, but frequent pullbacks curtail the progress.
A strict monetary policy often discourages the influx of money into risky markets. Institutional investors prefer government securities and other less risky asset classes to hedge against bad economic forces.
So, where does this leave Bitcoin price?
Some renowned investors and analysts believe that a bull run is way overdue. For instance, Michaël van de Poppe told his roughly 630,000 followers on Twitter that he would “preferably want to be long on the markets of crypto (Bitcoin price) here rather than waiting for $12-14K.”
BTC/USD daily chart
Following a rejection at $19,300, Bitcoin price slipped to trade at $18,897 at the time of writing. Declines might stretch further if buyers fail to reclaim the 23.6% Fibonacci retracement level. If push comes to shove, last week’s support at $18,300 would be tested next – a move that could pave the way for another major dip to $14,000 and $12,000, respectively.
Bitcoin price may wallow in the intense overhead pressure in the near term as it awaits an influx of money from investors. However, the looming global recession could further stifle investor interest.
Bitcoin IOMAP on-chain model
At the same time, the IOMAP by IntoTheBlock reveals immense resistance toward $22,000. Approximately, 1.22 million addresses previously purchased 571,500 BTC between $19,617 and $20,158. As Bitcoin price moves up the ladder, holders in this range will likely sell at their various breakeven points, which may sabotage recovery.