Bears Holes in Bitcoin Price Technical Structure Amid Sharp UK Recession

The Bitcoin price faces a number of external forces that continue to make mining a daunting task. The US Federal Open Markets Committee (FOMC) raised interest rates by 0.75% on Wednesday, a move tailored to combat inflation.

Before market participants got used to the peak, the Bank of England (BoE) warned of a recession in the UK. A recovery across the crypto market is likely to remain on hold unless investors stop waiting for a price floor 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 winter. Larger increases may follow in November with the sole aim of getting inflation under control.

Although a recession may have started in the UK, the BoE refrained from taking extreme measures like the US central bank, which has consistently raised interest rates by 0.75%.

The BoE is forecasting a 0.1% fall in GDP (gross domestic product) this quarter, which could mean a recession is inevitable. However, a government spokesperson pointed out that “Britain is not alone in facing slow growth, with Putin’s illegal invasion of Ukraine and weaponization of energy posing a global challenge to economies around the world.”

The state of the Bitcoin price in a looming global recession

The US recorded two quarters of negative economic growth in 2022, while Germany’s Deutsche Bank predicts -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 are limiting progress.

A tight monetary policy often discourages the flow of money into risky markets. Institutional investors prefer government securities and other less risky asset classes to hedge against adverse economic forces.

So, where does this leave the Bitcoin price?

Some reputable investors and analysts believe that a bull run is long overdue. For example, Michaël van de Poppe told his approximately 630,000 followers on Twitter that he would “prefer to be long the crypto markets (Bitcoin price) here instead of waiting for $12-14K.”

BTC/USD Daily Chart

After a rejection of $19,300, the Bitcoin price fell to trade at $18,897 at the time of writing. The declines could extend further if buyers fail to regain the 23.6% Fibonacci retracement level. If push comes to shove, last week’s support at $18,300 will be tested next – a move that could pave the way for another big decline to $14,000 and $12,000 respectively.

Bitcoin price may wallow in the intense overhead pressure in the short term as it waits for an influx of money from investors. However, the looming global recession may further stifle investor interest.

Bitcoin IOMAP chain model

At the same time, IOMAP by IntoTheBlock reveals huge resistance at $22,000. About 1.22 million addresses previously bought 571,500 BTC between $19,617 and $20,158. As the Bitcoin price moves up the ladder, holders in this area are likely to sell at their various breakeven points, which could sabotage the recovery.