Bitcoin (BTC) starts a new week in a precarious place as global macro instability dictates the mood.After sealing a weekly close just inches above $19
Bitcoin (BTC) starts a new week in a precarious place as global macro instability dictates the mood.
After sealing a weekly close just inches above $19,000, the largest cryptocurrency still lacks direction as nerves heighten over the resilience of the global financial system.
Last week proved a testing time for risk asset investors, with gloomy economic data flowing from the United States and, moreover, Europe.
The Eurozone thus provides the backdrop to the latest concerns of market participants, who are watching as the financial buoyancy of major banks is called into question.
With the war in Ukraine only escalating and winter approaching, it is perhaps understandable that hardly anyone is optimistic — what could the impact be on Bitcoin and crypto?
BTC/USD remains below its prior halving cycle’s all-time high, and as comparisons to the 2018 bear market flow in, so too is talk of a new multi-year low.
Cointelegaph takes a look at five BTC price factors to watch in the coming days with Bitcoin still firmly below $20,000.
Spot price avoids multi-year low weekly close
Despite the bearish mood, Bitcoin’s weekly close could have been worse — at just above $19,000, the largest cryptocurrency managed to add a modest $250 to last week’s closing price, data from Cointelegraph Markets Pro and TradingView shows.
That prior close had nonetheless been the lowest since November 2020 on weekly timeframes, and as such, traders continue to fear that the worst is yet to come.
“The bears remained in full swing last night during the Asian, while the bulls failed to give us any good rallies to work off on,” popular trader Crypto Tony wrote in part of a Twitter update on the day.
Others agreed with a summary which concluded that BTC/USD was in a “low volatility” zone which would necessitate a breakout sooner or later. All that was left was to decide on the direction.
“Next big move is up,” Credible Crypto responded.
“Typically prior to these major moves and after capitulation we see a period of low volatility before the next big move begins.”
As Cointelegraph reported, the weekend was already tipped to provide a boost of volatility as suggested by Bollinger Bands data. This came hand in hand with rising volume, a key ingredient in sustaining a potential move.
“Weekly chart BTC shows a massive increased volume since the beginning of the third quarter + weekly bullish divergence on one of the most reliable time frames,” fellow trading account Doctor Profit concluded.
“Bitcoin price increase is just a matter of time.”
Not everyone eyed an impending comeback, however. In predictions over the weekend, meanwhile, trader Il Capo of Crypto gave the area between $14,000 and $16,000 as a longer-term target.
“If this was the real bottom… bitcoin should be trading close to 25k- 26k by now,” trading account Profit Blue argued, showing a chart with a double bottom structure potentially in the making on the 2-day chart.
Credit Suisse unnerves as dollar strength goes nowhere
Beyond crypto, attention is coalescing around the fate of major global banks, in particular Credit Suisse and Deutsche Bank.
Worries over liquidity resulted in emergency public reassurances from the CEO of the former, with executives reportedly spending the weekend calming major investors.
Bank failures are a sore spot for underwater hodlers — it was government bailouts of lenders in 2008 which originally spawned Bitcoin’s creation.
With history increasingly looking to rhyme nearly fifteen years later, the Credit Suisse saga is not going unnoticed.
“We can’t see inside CeFi firm Credit Suisse — JUST LIKE we could not see inside of CeFi firms Celsius, 3AC, etc.,” entrepreneur Mark Jeffery tweeted on the day, comparing the situation to the crypto fund meltdowns earlier this year.
For Samson Mow, CEO of Bitcoin startup JAN3, the current environment could yet give Bitcoin its time to shine in a crisis instead of staying correlated to other risk assets.
“Bitcoin price is already pushed down to the limit, well below 200 WMA,” he argued, referring to the 200-week moving average long lost as bear market support.
“We’ve had contagion from UST/3AC and leverage flushed already. BTC is massively shorted as a hedge. Even if Credit Suisse / Deutsche Bank collapse & trigger a financial crisis, can’t see us going much lower.”
Nonetheless, with instability already rampant throughout the global economy and geopolitical tensions only increasing, Bitcoin markets are voting with their feet.
The U.S. dollar index (DXY), still just 3 points off its latest twenty-year highs, continues to circle round for a potential rematch after limiting corrective moves in recent days.
Looking further out, macro economist Henrik Zeberg repeated a theory that sees DXY temporarily losing ground in a major boost for equities. This, however, would not…
cointelegraph.com