Two Years After The COVID-19 Disaster, Here Are Three Points To Understand About Bitcoin This Week.

2022-03-14 | Selina Mathew

Two Years After The COVID-19 Disaster, Here Are Three Points To Understand About Bitcoin This Week.

Bitcoin (BTC) begins the fresh week battling to maintain strength as important macro shifts loom on the horizon.

The United States Federal Reserve is expected to be the primary discussion topic for hodlers in what might be a pivotal week for Bitcoin as well as altcoins' relationships with conventional assets.

There is enough of worry in the air, regardless of the trade, in an environment of continuing massive inflation, continuous monetary stimulus, and international turbulence concentrated on Europe.

Add to that Bitcoin's inability to profit from the upheaval, and the consequence is some considerable skepticism - what would it require to restore trust?

Although it appears that hardly anything can shake the already months-old established order on Bitcoin markets, which were trapped in a trading range for all of 2022, impending events might offer the impetus for a sea change in both attitude and price movement.

Russia, China, inflation, as well as the Federal Reserve

Whether you like it or not, the Fed is going to be the deciding factor in cryptocurrency success this week.

Officials would determine if to continue with a crucial interest rate rise that has been predicted since the previous year on March 16.

The Fed is facing an issue: inflation is on the rise. The urge to decrease its record financial sheet from two years of coronavirus indulgences, on the other hand, is excessive.

A rate rise is thus expected to be small — possibly a quarter of a premise point — however, the repercussions for Bitcoiners might be significant.

BTC has indeed demonstrated that it is inextricably linked to US stocks, and any knee-jerk responses to the Fed would very certainly be replicated.

Stocks are not fans of rate rises, given the free money phase that preceding COVID-19 responses were a golden one that lasted until late 2021. This happens as the truth of the Fed's actions becomes clear. Bitcoin, too, reached an all-time high in November before plummeting precipitously.

The Fed, nevertheless, is hardly the sole macro actor that Bitcoiners should be concerned about.

Legislators in Europe are preparing to vote on crypto regulations, with some proposing to impose a ban on proof-of-work based on environmental issues.

While detractors have repeatedly ridiculed the concept as ridiculous, the prospect of a possible win lingers.

The Russo-Ukrainian crisis is progressing, as is the economic consequences – Russia is on the verge of collapse, while sanctions, as well as trade restrictions, are contributing to inflationary strains.

Nevertheless, COVID-19 is again on the radar in China, with a growing number of inhabitants detained.

The spot price "commemorates" the two-year anniversary of the COVID-19 accident.

For brief Bitcoin traders, the situation is at best perilous.

Considering that any of the aforementioned macro reasons may cause a new stocks meltdown, Bitcoin appeared to countless to be a waiting duck as the week started.

Such surrender has previously been mentioned as a distinct prospect, as well as the chronology would be ominous, arriving nearly precisely two years to the day that BTC/USD collapsed to $3,600 in the initial wave of COVID-19 chaos.

As $40,000 fails to keep for over a couple of days or hours, support levels stay unfulfilled.

The weekly end witnessed a last-minute drop near $37,000, BTC/USD, but it recovered much of the losing territory to trade at $38,600.

Assessing the relatively close possibilities, other Twitter account Plan C used his Confluence Floor Model to suggest that a macro price bottom is possible in the following month.

Nevertheless, such a low might fall to roughly $27,000. This will push Bitcoin less than its 2021 starting price as well as temporarily out of the zone it has been stabilized in since then.

Collecting gives a sliver of a bright spot.

In terms of collection, it seems that the desire for Bitcoin at present pricing is not entirely negative.

Whales has indeed been active lately, while new investors now hold a one-year high of BTC supply.

Those tendencies are currently being mirrored in the continual supply of new lows in exchanges.

On March 1, Philip Swift, the developer of the on-chain analytics portal LookIntoBitcoin, noticed the modifications.

 Additional information from on-chain analytics firm CryptoQuant verifies the pattern, revealing that BTC holdings on the 21 main exchanges it monitors are at their weakest since the beginning of August 2018 – 2.32 million BTC.

The tale of exchange accounts is quite complicated, as various transactions reflect distinct trends.

Glassnode, another on-chain analytics tool, gave substantial emphasis to the problem in the current issue of its weekly newsletter, The Week On-Chain, published March 7, observing that sell-side supply generally remained "pretty small" considering macro conditions.

According to the most recent Glass node statistics, exchanges have shed approximately $1.9 billion in BTC in the last week.

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