Bitcoin reaches a new level of resistance
Stock market sentiment won’t go unnoticed
Monetary authorities are pushing users towards bitcoin
International consortium of news organizations developing transparency standards.
What topics will be relevant in the coming days for the cryptocurrency market. Read on to find out five key factors that can influence the price of Bitcoin in the coming week..
Despite the drawdown at the beginning of the week, bitcoin managed to regain its losses and even fix a new high this month at $ 7,750. At press time, the first cryptocurrency is trading at $ 7,500, up nearly 5% from the start of the week. Major altcoins also rose in price quite well, with Tezos (XTZ) and Stellar (XLM) emerging as the leaders, gaining 23% weekly each. Cardano (ADA) rose 18%, ranking third among the top 20 coins. The total capitalization of the cryptocurrency market has reached $ 219 billion, and the average daily trading volume is $ 126 billion.
Technically speaking, the main event of the week was Bitcoin’s breakout of the range. Fundamentally, market sentiment continued to be driven by traditional markets. Having gone into the negative zone, oil prices pulled other markets with them. The crypt was also hit by a ricochet. In particular, bitcoin went under the $ 7,000 mark, where it spent most of the week. Despite the lack of a clear correlation between bitcoin and oil, the cryptocurrency is prone to sell-offs during times of general panic..
Traditional markets will continue to storm in the coming week. In the states, the season of earnings reports begins, in addition, a new batch of macroeconomic statistics will be released, including data on inflation in the US and the Eurozone, as well as preliminary reports on GDP in the first quarter, which will already partially reflect the consequences of the coronavirus pandemic and the global lockdown.
What should crypto traders look for? Below are five factors that will shape market sentiment in the coming days.
1. Course for $ 8,000, then it’s scary
The confident break of $ 7,500 has improved the short-term technical picture, but analysts advise not to flatter ourselves. There is strong resistance ahead, formed by the 200-day moving average on the way to the psychologically significant $ 8000 mark. It is unlikely that this level will be broken on the first try without additional fundamental incentives. This means that the market may enter the next phase of consolidation in the range of $ 7500-7800, while a break above $ 8000 can trigger stops and accelerate growth towards the next resistance in the $ 8500 and $ 9100 area. Detailed technical analysis Investing in and trading in cryptocurrencies is impossible without the use of technical and fundamental analysis. Despite the popularity of both of these tools, intraday … Read more here.
2. Fiscal incentives or obsessive sound brrr
Governments in developed countries are ready to allocate a total of $ 8 trillion to support economies amid the coronavirus pandemic. The Federal Reserve has zeroed interest rates and put the printing press at full capacity to fund government spending. The European Central Bank, Bank of Japan and Bank of England are following the same path. Even the Central Bank of Russia cut the rate by 0.5% to 5.5% and promised further easing of monetary policy in order to smooth out the deflationary consequences of the falling purchasing power of Russians..
However, many experts consider the “printing press” and “helicopter money” policy to be a short-sighted practice, built on the principle of “there’s a flood after us”. Not surprisingly, some crypto enthusiasts have compared the policies of central banks to the Flood, and Bitcoin to Noah’s Ark, which will save investors from the depreciation of fiat money..
This topic has spawned quite a few memes in the cryptocurrency community, and it will remain relevant this week. New stimulus measures will provoke a new wave of “brrr posts” on Twitter and interest in cryptocurrency.
3. Subtle correlation
The topic of correlation between bitcoin and other asset classes will remain relevant for a long time. Crypo enthusiasts argue that bitcoin does not depend on price movements in other markets, therefore, it represents a unique tool for hedging risks. However, not everything is so obvious here. Even in the absence of rigid dependence, bearish sentiment in the stock market still affects the price of bitcoin, which often reacts to a stock crash as a risky asset. In this regard, the season of publication of reports on earnings in the United States may cause volatility in the cryptocurrency market. First of all, investors will be interested in the data of such tech giants as Google, Apple, Amazon.
4. Institutional interest is on the rise
Former Deutsche Bank CEO launches his own exchange, venture capitalist Tim Draper launches a cryptocurrency plugin for WordPress, and Renaissance Technologies’ Medallion Foundation starts trading bitcoin futures. These are just a few examples confirming the growing interest in cryptocurrencies from large traditional investors and financial institutions. Earlier, the editorial staff of BeInCrypto wrote that cryptocurrency portfolio managers managed to make money during the crisis. … Specifically, Grayscale’s Q1 2020 report states that institutional players’ investments have peaked in the fund’s history..
5. Halving almighty
In less than three weeks, the size of the reward received by miners for the extraction of a block will be halved to $ 6.25. This event should reduce inflation on the network and make Bitcoin even more effective in fighting irresponsible monetary policy. Theoretically, the demand for bitcoin should grow, however, some experts believe that everything has long been incorporated into prices, so the reaction of the bitcoin rate to halving will be minimal. However, be that as it may, the approaching halving halving of bitcoin cuts the number of new coins created and earned by miners in half. This happens about every four years and … More increases the uncertainty and nervousness in the market, which can lead to sharp fluctuations in BTC / USD.
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