Bitcoin (BTC) starts a new week at record price levels – can it stay that way?
After a whirlwind weekend, the largest cryptocurrency is posting mixed results ahead of Wall Street’s opening on Monday.
Cointelegraph looks at five factors that could influence the direction of BTC/USD in the coming days.
Chinese equities lagging behind growth
The macro picture was mixed this week, with no clear indication of the potential impact on risky assets.
While bond yields are worrying US futures markets, things aren’t looking much better on the other side of the world in Asia, with China reporting near-impossible growth in the first few months of 2021.
As Bloomberg notes, the data looks much clearer thanks to a comparison with the same period last year, when China was under control for the coronavirus. Industrial production and retail sales exceeded their targets by 32% and increased by 35% and 33.8% respectively.
However, the general mood was tempered by concerns over liquidity at China’s central bank, the People’s Bank of China (PBoC).
The PBOC has withdrawn more than 600 billion yuan from the market since the beginning of the year to rein in asset bubbles, Xin Zhaopeng, an economist at the Australian and New Zealand banking group, told Bloomberg.
Even the Federal Reserve’s planned interest rate hike – which some considered all but certain after this year’s and last year’s print events – is anything but a clean sweep, the bank said.
Economists expect the Fed to raise interest rates by 50 basis points in 2023. But they also expect the U.S. CenBank’s own forecast, published next Wednesday, to show that the median of the Fed’s official interest rate forecast for the full year will remain at zero, market commentator Holger Zschaepitz summarized Monday.
United States send incentive checks.
In contrast, for US retail investors, a single macroeconomic theme dominates in the short term: Dunning checks.
After receiving from lawmakers, $1,400 in direct mail payments have already arrived as part of President Joe Biden’s $1.9 trillion stimulus bill, which is already being labeled as an advertisement for bitcoin.
This measure adds to the colossal US debt, which already exceeded $28 trillion before it was approved, and points to a possible return of inflation, although the Fed itself maintains that the risk of such a scenario remains low.
Federal Reserve Balance Sheet. Source: Federal Reserve
For now, however, bitcoin supporters are only concerned about the size of the recent monetary windfall that will affect the cryptocurrency ecosystem.
Millions of people are very happy that the government is passing a $1.9 trillion stimulus bill. Who doesn’t like free money? That was the response this weekend from Robert Kiyosaki, author of the popular book Rich Dad Poor Dad.
The problem is that free money makes the poor and middle class poorer. Buy gold, silver and bitcoins.
Silver has been in Americans’ wallets since the 14th. March, but recent reports indicate that many will have to wait until at least Wednesday to hand it out.
Last year, when the value of bitcoin was a fraction of its current price and the announcement itself was much weaker, the wave of redemptions on Coinbase at the exact amount of the first incentive check was still noticeable. This time the conditions for a sudden turnaround in private investment are much more favorable.
Unlike 2020, notes analyst Lyn Alden, the timing of the third round of payments could make it easier for benefit recipients to choose alternative investments.
The third round of stimulus checks will be discontinued if income growth from the second round of checks still puts personal income above trend, Alden tweeted Saturday.
On the other hand, the second round of vouchers was terminated only after the first round of vouchers and unemployment benefits.
In bitcoin, Monday has already proven to be a difficult day for traders.
After hitting a record high of $61,700 over the weekend, bitcoin failed to maintain its upward trend and fell below the $60,000 level during the trading session.
1-hour candlestick chart of BTC/USD (Bitstamp). Source: View of the shop
At the time of writing, the losses are not over yet as BTC/USD is approaching the $58,000 mark after dropping below its previous high of $58,300 from last month.
A look at Binance’s order book data shows support at $57,000, but if this level is broken, levels closer to $50,000 can be expected.
Financial values of purchases and sales for the year 15 March 2021. Source: Material displays
The cause of the accelerated fall may be a known source. As online analysis service CryptoQuant showed on the day, the coin’s reserves are at a one-month high, reversing the trend that continued on Sunday when traders put BTC on reserve.
When appetite briefly returns to sales, downward pressure is the natural result. The data shows that the Twins have experienced significant inflows, indicating that the professional trader, likely a whale, is willing to dump some or all of the stock.
Graph of the balance of bitcoins against BTC/USD. Source: CryptoQuant / Trading overview
This $18,000BTC deposit is legal because it is a transaction between users’ wallets and the Gemini e-wallet, said Ki Young Ju, CEO of CryptoQuant.
The average inflow of all scholarships increased significantly as a result of this submission. Don’t overdo it if you’re in a long position.
As Cointelegraph reports, this practice is far from uncommon, but given the sums involved, sentiment could still be spooked.
Whale’s sale also accompanied the latest major correction in bitcoin, which hit a 20 percent high after reaching a record high of $58,300 in February.
Coins flow in strong hands
The contrasting blow at the bottom of the frame are data showing that, conversely, large amounts of bitcoin were withdrawn from the market over the weekend.
According to Glassnode, another market watcher, liquid supply was largely neglected, especially on Sunday, when all-time highs did not dampen investor enthusiasm.
The firm has previously noted that buyers have a historical tendency to hold on for long and not sell when temporary market phenomena, such as bitcoin, reach a certain price point.
Change in bitcoin liquidity supply from the BTC/USD chart. Source: Glassnode
The increase also shows that despite the growth in BTC balances on all exchanges that day, the amount of bitcoin available is still much lower than it was six months ago. Coinbase shares, for example, have lost nearly 20% since December alone.
BTC Coinbase balance table. Source: Glassnode
The difficult road to the $70,000 goal
For the bulls to run for their money, refinancing prices themselves have made the biggest jump since February 23 – suggesting it may still be worth going short.
Graph of bitcoin funding rates. Source: Bybt
The data confirms the conclusions of analysts, including Cointelegraph filbfilb, which presented data late last week arguing that differences in funding rates between exchange platforms were clouding the picture of a broader movement that would soon affect BTC markets.
With the macro background so bullish for BTC right now, we think it’s a good idea to be patient and not liquidate on the low timeframe when bigger moves are likely just around the corner, they write in an update.
Filbfilb himself is aiming for a local peak of $70,000 or more, which he calls bitcoin’s destination, but he warns that the road to it will involve much more turbulence than when bitcoin reached $50,000.
In a comment on his Telegram trading channel, he cited Tesla’s outright purchase of bitcoins as an example that may not be repeated this time around.
BTW, I doubt he’ll come out like he did with the Elon candle will probably be much dirtier this time, he wrote.
frequently asked questions
What are the 5 most popular cryptocurrencies?
The Basics – A Concise Guide ….
Can you lose all your money in bitcoins?
Assuming you don’t use leverage – no, you will never lose more money than you put into bitcoin. In the worst case scenario, BTC drops to zero, meaning that if you buy $10,000 worth of BTC, your $10,000 will be worth $0.
Will bitcoin reach 200K?
We look forward to 2021 with great confidence: We expect bitcoin to be around $100,000 to $200,000 by 2021, and we’d be shocked if it didn’t reach at least $50,000. Post BTC for reaching 0k-0k in 2021, but the rebound could happen before the move to next year : The post Bitcoin analyst appeared first on BitcoinExchangeGuide.