Bitcoin’s price remained in a tight range today, January 22, as investors reacted to new developments on Greenland and to ongoing ETF outflows.
Summary
- Bitcoin price retreated after the US released strong GDP data.
- The numbers pushed the odds of Federal Reserve interest rate cuts this year.
- Technical analysis suggests that Bitcoin may continue falling, potentially to the key support at $80,000.
Bitcoin (BTC) was trading at $89,400, a few points above this week’s low of $87,200. Still, there is a risk that the coin will continue to fall now that the odds of Federal Reserve interest rate cuts have fallen after the U.S. released strong economic data.
A report released by the Bureau of Economic Analysis showed that the economy did better than expected in the third quarter. The economy grew by 4.4%, higher than the previous estimate of 4.3%. It was also much better than the second quarter’s growth of 3.8%.
These numbers suggest the Federal Reserve may not cut interest rates again this year, as analysts expect fourth-quarter growth to exceed 5%. Data on Polymarket shows that odds of three cuts this year dropped by 11% to 27%.
Bitcoin and other risky assets often perform well when the Federal Reserve adopts a highly dovish stance. A good example of this is what happened during the COVID pandemic.
Bitcoin price could also be at risk as exchange-traded fund outflows jump. Data compiled by SoSoValue shows that these funds had over $708 million in outflows on Wednesday, up from the previous day’s $408 million. These funds have shed over $1.5 billion in the last three days
Bitcoin’s performance could be due to investors rotating to gold, whose price has jumped to a record high. In a report today, Goldman Sachs boosted its target to $5,400, citing the rising central bank and corporate demand.
Bitcoin price technical analysis
The daily timeframe chart shows that BTC has retreated over the past few days, moving from its year-to-date high of $97,790 to the current $89,300.
It has moved below the lower boundary of the ascending triangle, confirming that bears have prevailed. Also, it remains below the 50-day moving average and the Strong, Pivot, Reverse of the Murrey Math Lines tool.
The Relative Strength Index has continued to fall, moving below the neutral point at 50 and pointing downwards.
Therefore, the most likely Bitcoin price forecast is bearish, with the next key support level to watch being at $80,485, its lowest level in November.
This view mirrors what Michael Novogratz, the CEO of Galaxy Digital. In an X post on Wednesday, he warned that Bitcoin will remain under pressure unless it moves above the key resistance levels at $100,000 and $103,000.
