Bitcoin (BTC) is starting a new week with a strong upward trend Stocks fell and BTC closed above $ 50,000 for the week.
After a mixed performance last week of running multiple tests of the $ 46,000, Buyer support is coming and BTC / USD is down 15% from its all-time high.
Cointelegraph takes a look at what could be in store for traders in the coming days, with five factors influencing Bitcoin’s price action.
Stocks fall when the dollar gains ground
The tide turns to last year’s equity miracle. Indexes drop left and right amid warnings that the slide is far from over.
After significant losses in technology stocks, including crypto industry favorites, Tesla and MicroStrategy, Asian stocks lost more than 1% on Monday.
Despite the strong closing price last week In the US, a domino effect was expected before Wall Street returned. According to Morgan Stanley analysts The Nasdaq 100 could even hit its 200-day moving average, which is about 800 points below its current level of 12,642..
“”You will find a great deal of volatility in the markets“Kim Stafford, head of Asia Pacific for Pacific Investment Management, told Bloomberg.
“We believe confidence is improving, especially with the introduction of vaccines. Hence, we will see a recovery in growth around the world. There are many reasons to trust the market, but a lot of it is also discounted. “
Given the grim near-term outlook for stock traders The US dollar is increasing its current performance.
Extension of the series until the end of February, The US dollar currency index (DXY) hit 92.19 over the weekend and topped the 92 mark on Monday.
The recent moves in the index, traditionally a problematic phenomenon for Bitcoin price strength, have been less noticeable than last year. Overall, BTC / USD has shrugged to take an increasingly asymmetrical path.
Along with the dollar Oil prices rose again after it became known that Saudi Arabia’s infrastructure had been attacked. However, production was not affected.
Stimulus controls along the way
The main driver behind the dollar’s strength, if not intuitive, was the news that Legislature will bloat its $ 1.9 trillion offer by passing the latest coronavirus stimulus package.
Approved by the Senate on Sunday, President Joe Biden’s copious injection of cash will run up new debt on the land’s existing mountain but will allow eligible Americans to pay $ 1,400.
Given the rise in Bitcoin’s public profile this year compared to the last major stimulus payment of $ 1,200 in March 2020 Expectations are high that at least some of the money will go to BTC.
The numbers that are now rampant online speak for themselves. According to the online monitoring resource Bitcoin Stimulus the combined value Of the previous two checks ($ 1,200 and $ 600), it would be more than $ 10,250 as of March 4th if each recipient had bought Bitcoin immediately.
In other words, The first $ 1,200 stimulus bought 0.18 BTC upon receipt, while the $ 600 check bought 0.02 BTC. This time, although the dollar amount is higher, at Printing time would only be worth 0.028 BTC.
For his part in the long term The weakness of the dollar weighs on investors both from increased supply and from other implications coupled with the highly controversial economic response to the virus.
In spite of proclaim that he is not a “Bitcoin maximalist”, Veteran trader Peter Brandt said that Bitcoin would only benefit from current policies for longer periods of time.
“”The devaluation of the purchasing power of the US dollar … has only just begun“he warned Sunday.
“Because of this, Bitcoin BTC, real estate, US stocks and commodities will continue to trend higher in fiat dollar terms.”
Brandt also revealed that Your second largest investment position after real estate is your allocation of BTC.
Bitcoin has the second highest weekly close
Within the Bitcoin realm The cops perked up when the weekend hit and topped $ 50,000.
Simultaneously with the announcement of the stimulus, Bitstamp’s local highs hit $ 51,177. At once, Positive investment news from China widened the supply shortage and focused on institutional purchases that reduce the already dwindling amount of BTC available for purchase on the market.
Though I can’t stay on Monday The psychologically significant level could hold up to the weekly close and was the second highest weekly close for Bitcoin.
Rafael Schultze-Kraft, co-founder and technical director of Glassnode, a chain analysis company, analyzed and predicted the behavior of traders It is unlikely to drop below $ 46,600 again.
“This support is continuing very well. And it has increased. We now have a wall of $ 1.2 million BTC chained between $ 46.6,000 and $ 48.6,000“, wrote On Sunday.
“It’s 6.5% (!) Of the offer in circulation. I would be surprised if we were down soon. I was in a long position at
For the Cointelegraph market analyst Michaël van de Poppe, A noticeable trend in spite of higher price levels was the lack of general interest on the part of consumers.
“”I recently noticed the decline in social media exposure and media attention to Bitcoin. While a few weeks ago everyone and their parents wanted Bitcoin for FOMO “, tweeted Monday.
“The current period, however, is the time to build your holding company. When there is no hype. “
The popular Twitter account Bitcoin Archive agreed and responded to it The interest “rises and falls” with the price development.
Other indicators in the chain confirmed this Market participants carry on like nothing.
At $ 50,000 Miners are not interested in selling, while inflows to exchanges and foreign exchange reserves continue to declineaccording to dates.
For the statistician Willy Woo, The selling pressure is more due to institutional brokers who need to prepare for reporting as the first quarter ends, which is far from a bearish sign.
“Who sold? Aside from liquidating long margin positions, I think that’s the case based on the data Hedge funds will be rebalanced for reporting at the end of the first quarter“, He said to his Twitter followers at the end of last week.
“Many have a mandate to restore balance when an allocation is too large. BTC has done an incredible job. (Sell your winner, buy more losers). “
Woo stated that too The big whales have sold while the smaller ones, which are between 10 and 100 BTC, have increased their presence.
“If we look at the age of the coins in this sale, The fact that the latency is low shows that these are young coins. They are new whales that they recently bought and that are selling their stock“He added Woobull, along with Glassnode charts and his own analytics resource.
On the contrary, he said, Support for the purchase comes from “strong hodlers”.
Extreme greed returns
After a quick fall into the area of ”fear” The fear and greed index again points to “extreme greed” among investors.
As an indication that new price increases can only be short-lived, The index hit 81/100 on Monday, up from 76 the previous day. A week ago I was 38/100.
However, the on-chain analysis has a compelling counter-argument, as demonstrated by Glassnode’s NVT (Network Value for Transactions) data The volume has largely accompanied the recent price increases.
“”What Makes a Healthy Bitcoin Price Rise? … one that is supported by the volume in the chain!“, they tweeted Co-founders Yann Allemann and Jan Happel referring to Woo.
“If the price rises too quickly without blockchain activity catching up, it is often unsustainable.”
The NVT has risen satisfactorily since before the peak of the bull market in 2017.