By
Bena Ilyas
May 13th, 2024
Bitcoin entered another correction over the weekend as volatility sweeps in. The $37,000 seems crucial support for Bitcoin below which it can slip further to $30,000.
The pressure on Bitcoin investors seems to back once again with its continuous sideways movement from the $45,000 levels. Over the last weekend, the BTC price took a dive under $38,000 before recovering once again. As the Bitcoin price enters a strong correction once again, the Bitcoin Fear and Greed Index shows signs of ‘extreme fear’.
Bitcoin Fear and Greed Index is 25 — Fear
Current price: $38,308 pic.twitter.com/65yiB9xSIx— Bitcoin Fear and Greed Index (@BitcoinFear) February 21, 2022
The global macros and geopolitical situation shave been putting up major pressure on Bitcoin recently. The Russia-Ukraine war possibility has got the world to its toes. The US and the UK have warned Russia of major financial sanctions should the situation escalate further.
The recent developments could have a major knock-off effect on the equity and the crypto market this week ahead. Bloomberg’s senior commodity strategist Mike McGlone believes that growing inflation this year could have an overall positive impact on Bitcoin despite immediate headwinds. McGlone writes:
“Bitcoin indicating a rough week ahead – Inflation Unlikely to Drop Unless Risk Assets Do: Most assets are subject to the ebbing tide in 2022, on the inevitable reversion of the greatest inflation measures in four decades, but this year may mark another milestone for Bitcoin.”
Bitcoin’s recent move to $45,000 only just turned out to be an exit liquidity pump for Bitcoin investors. Also, the Bitcoin whale activity has remained absolutely neutral starting this month. Crypto analyst Ali Martinez explains:
“The number of whales on the network with 100 to 100,000 $BTC has remained flat since Feb 1. These wealthy market participants do not appear interested in buying #BTC at the current price levels and could be expecting to buy #Bitcoin at a discount.”
Key Macros Affecting the Bitcoin Price amid Growing Fear from the Side of Investors
The US has been reporting record inflation numbers for over three decades which has forced the Federal Reserve to step in. The US central banks have hinted at multiple interest rate hikes coming ahead this year which is causing the money to move away from crypto to other risk-off assets.
Additionally, all eyes will be on the executive order for digital assets coming ahead this week from the Biden administration. The executive order is likely to force financial agencies in creating a comprehensive regulatory framework for digital assets.
As of now, $37,000 will be the key support level to watch for Bitcoin. Below this, it could spiral to a deeper correction.
#Bitcoin could be looking to find support around the 200MA on the 3-day chart at $37K or it may test Tom DeMark’s setup trendline at $33.5K.
Failing to hold above this crucial support zone could trigger a cascade of liquidations in the futures market, pushing $BTC further down. pic.twitter.com/lpCRbF917f
— Ali (@ali_charts) February 20, 2022
However, some analysts are predicting that this is the beginning of new crypto winter. Huobi Exchange CEO Du Jun told CNBC that we may not see another Bitcoin bull run by late 2024 or early 2025. He pointed out the Bitcoin halving cycle to affirm his basis. Du said:
“If this circle continues, we are now at the early stage of a bear market. Following this cycle, it won’t be until end of 2024 to beginning of 2025 that we can welcome next bull market on bitcoin.”
Read other Bitcoin news here.