Bitcoin (BTC) starts a new week under $30,000 as the battle to save the market from fresh lows grinds on.After hitting its highest since the Terra LUN
Bitcoin (BTC) starts a new week under $30,000 as the battle to save the market from fresh lows grinds on.
After hitting its highest since the Terra LUNA crash last week, the largest cryptocurrency nonetheless continues to fail to reclaim $30,000 as support.
What could be in store this week? The potential for major upheaval from macro players, notably the United States Federal Reserve, is shapeshifting this week ahead of the World Economic Forum.
At the same time, internal crypto market pressure remains as the implications of LUNA’s collapse continue to play out.
Cointelegraph takes a look at five potential BTC price movers for the coming days.
Record weekly downside greets bulls
The sense of caution among traders is palpable this week after the past seven days upended market expectations.
When Blockchain protocol Terra’s LUNA and TerraUSD (UST) tokens imploded, their decline ricocheted throughout crypto markets, and Bitcoin was naturally no exception.
After dipping to near its realized price just below $24,000, BTC/USD staged something of a V-shaped recovery to bounce past $31,000 in the following few days. That strength, however, now appears limited, as $30,000 proves to be a stubborn level to win over for good.
While the picture looks decidedly more reassuring than that of some altcoins, traders are keeping away from any firmly bullish price takes.
A key narrative gaining traction revolves around current levels forming the basis of a relief bounce which will ultimately end not just in rejection but an attack on lower lows than those from last week.
This for me is the best case scenario on #Bitcoin due to the rejection and 3 wave confirmation. We either drop to new lows from here, or we complete the C wave flat then pump once more
If your a scalper this will be heaven for you over the next few days pic.twitter.com/LNvVbpXPG6
— Crypto Tony (@CryptoTony__) May 16, 2022
“Just as us bulls fought the trend for the past few weeks, I think bears about to deny or refuse any more upside,” popular Twitter account IncomeSharks said in part of two recent posts on the BTC/USD outlook.
It added that those only now flipping bearish, however, will “get too stuck in their bias.”
Fellow trader Crypto Tony meanwhile said that the pair needs to reclaim $31,000, not just $30,000, in order to continue higher thanks to the former marking the highs of the week’s range.
Zooming out, the picture hardly seems any less precarious than on hourly or daily timeframes.
The weekly BTC/USD chart, despite the modest recovery, closed its seventh red candle in a row on May 15 — the first time in history that such an event has occurred. The week closed out at around $31,300, data from Cointelegraph Markets Pro and TradingView shows.
Pondering whether protracted downside could continue much longer — even beyond 2022 — Twitter account Nunya Bizniz noted that leading into block subsidy halvings, Bitcoin has historically been far below all-time highs.
As such, it would fit historical precedent for BTC/USD to trade significantly under $69,000 at the time of its next halving in two years’ time.
BTC weekly:
At halvings, price has been considerably below ATH.
Makes me☹️
Different this time? pic.twitter.com/gQlQCEbW4w
— Nunya Bizniz (@Pladizow) May 16, 2022
DXY just won’t quit as Davos looms
Last week saw the Fed grapple with inflation, rate hikes and geopolitical strife, all factors that were ironically eclipsed almost immediately by Terra.
By contrast, no announcements of such significance are expected this week, but the underlying tensions have not gone away.
As such, the Russia-Ukraine war, inflation and measures being undertaken to mitigate it remain the topic du jour for central banks around the world. This will no doubt be a major topic of the World Economic Forum as the 2022 event begins on May 22.
The Forum, and the potential for Bitcoin-related soundbites from attendees both positive and negative, will follow a different gathering this week in El Salvador, where representatives of 44 countries will discuss Bitcoin.
“Tomorrow, 32 central banks and 12 financial authorities (44 countries) will meet in El Salvador to discuss financial inclusion, digital economy, banking the unbanked, the Bitcoin rollout and its benefits in our country,” President Nayib Bukele confirmed on May 15.
At the same time, the U.S. dollar refuses to quit when it comes to strength versus major trading partner currencies.
The U.S. dollar index (DXY), despite local consolidatory phases, remains in a firm uptrend which has denied bears a macro top for months.
DXY hit 105 on May 9, its highest since the week of Dec. 9, 2002.
“At the same time, the Euro is testing it’s 5-year lows vs the U.S. Dollar,” analyst Blockchain Backer tweeted as part of a thread on the macro environment as it relates to crypto.
“The Euro is a major component of the U.S. Dollar Currency Index (DXY), and…
cointelegraph.com