Five things to watch this week

In what appears to be a déjà vu to many dealers, Bitcoin (BTC) is starting a new week and quarter at the same level as on January 1, 2022, while maintaining support.

In recent days, price action has been quiet – perhaps too much – but behind the decreasing volatility, several indicators (from a macro and chain point of view) indicate that the market is close to launching its trend.

Let’s analyze together some aspects that may affect the performance of BTC in the coming week.

Inflation meets new money printing

There has been extensive discussion about how the injection of “easy money” will end after the pandemic and how the US Federal Reserve’s commitment to reduce its balance sheet and raise interest rates could affect risky assets like bitcoin.

So far, despite everything, the danger does not seem imminent, and in fact, the exact opposite appears to be happening in Asia.

as proven Holger SchaebitzMarket Analyst at Bank of Japan (BoJ) recently increase its budgetprint more liquid assets.

The Bank of Japan already had the largest balance sheet relative to GDP, and that trend is still going up, now at 136%.

For Zschaepitz, it’s not just a surprise, but it can be “The Greatest Critical Experiment in History”.

“By comparison, the European Central Bank and the Federal Reserve look like amateurs.”claimed.

Central bank balance sheet outline. Source: Holger Zschaepitz / Twitter

If the big cash press brings benefits to risky assets, not everyone will be convinced that much-discussed budget cuts will follow. According to many, central banks will have no choice but to appeal Inject additional cash.

“No government has ever resisted the temptation to print money to pay its bills and appease its citizens. A government will never willingly go bankrupt. That’s self-evident. I dare you to contradict the evidence.”Arthur Hayes, the former CEO of derivatives giant BitMEX, mentioned in a blog post shared in March.

“So if your time horizon is several years, then it’s time. If you mess with the bull, you get the horns. Remember: it is not gold or bitcoin that increases the price, it is the depreciation of the fiat currency in which it is priced.”

Contrasting viewpoint, as reportedcurve inversion In last week’s returns, higher interest rates contrast with the now high risks of a recession in the US. A combination that would put both Bitcoin and stocks under pressure.

Spot bulls target $50,000

So far, the lack of volatility is the main point of discussion among Bitcoin traders and analysts.

As reported by Cointelegraph Markets Pro and TradingView, the slight euphoria around the weekly close faded in a matter of hours, with the bears failing to reclaim the annual open, currently cemented as support.

BTC/USD (Bitstamp) weekly chart. Source: TradingView

As a result, BTC/USD is recording its exact year-to-date levels, but several short-term signals point to one of them. Continuing to climb.

popular analyzer stackinghighlighted Bitcoin’s first “volatility pressure” since January on the 12-hour chart.

Volatility pressure is forming on BTC dollar, 12 hour time frame.

The first since January. Currently there is with green candles.

The breakout arrow will indicate the trend when it occurs.

TechDev used the Bollinger Bands volatility meter, which now records BTC/USD moving in the middle of the channel with an upward bias.

As Cointelegraph recently reported, the odds are in favor of an attack on the $50,000 mark, a first of the year on Bitcoin.

Also, on its own, April is a historic bullish month for Bitcoin.

In March, buyers pulled coins from exchanges

It’s no secret that many bitcoins have left the exchange this year, but the latest data shows just how impactful it is Display pressure.

According to on-chain analytics company glassIn the past month, there were nearly 100,000 BTC outflows from exchanges.

Historically, outflows exceeded 100,000 bitcoins on just two occasions, making last March one of the most impactful.

“Total exchange outflows of this size have only been recorded in very few cases, particularly in the wake of the March 2020 liquidity crisis.”Glassnode added commentary on shared chart Twitter.

Pending chart of the net position of bitcoin exchanges. Source: Glassnode / Twitter

If investors re-propose a situation similar to what they saw after the collapse due to the outbreak, the effects could be similar, but it may take some time to show. In 2020, although the BTC/USD pair rebounded after dropping 60% in a few days, the price direction didn’t really change until the fourth quarter.

Analytics platform CryptoQuantwhich tracks the reserves of 21 major exchanges, highlights that total BTC stocks are at their lowest since August 1, 2018, with 2.303 million BTC signed.

In March, this downtrend pressed for a A total of 77,000 BTC withdrawn to private wallets.

Keep bitcoins on exchanges. Source: CryptoQuant

Don’t worry about altseason

When analyzing the relationship between Bitcoin and altcoins, an unusual result was found: aggregate open interest and volume in the altcoin derivatives markets surpassed Bitcoin for the first time in over a year.

Dynamics reported by cryptanalysis platform Coinalyzewho explicitly suggested that the much-discussed “altseason” might be upon us.

‘It could lead to a season, money is being funneled to a replacement now’Founder Gabriel Doudan told Cointelegraph.

These forecasts coincide with the notable inflows of cryptocurrencies recorded last week, which one analyst described as Increased risk appetite among investors.

“Keeping the spotlight on bitcoin may not hamper performance per se, thanks to lower volatility on the asset.”Dodan added.

“On the other hand, this makes BTC quite stable, as it is not exposed to excessive leverage: it is an excellent ground for BTC.”He is done.

Hash rate reaches a new all-time high

In the wake of the Bitcoin network’s record-breaking difficulty, the hash rate has also reached an all-time high.

To demonstrate the miners’ belief in long-term profitability by participating in the network, the hash rate equates to 223 spaces per second (EH/s), according to the data source. MiningPoolStats.

Bitcoin hash rate chart. Source: MiningPoolStats

Although just an estimate of the processing power allocated by miners, the hash rate has never been higher. According to the backers, it will continue to grow regardless of outside attempts to “suppress” Bitcoin.

“Bitcoin mining is practically the most anti-fragile system ever designed by man.”Francis Poliot, CEO of payment processor Bull Bitcoin, argued in a blog post last year devoted to Bitcoin’s hash rate and power consumption.

“Any attack on Bitcoin is guaranteed to make Bitcoin stronger, which in itself means higher price, higher hash rate, and higher power consumption.”

The debate that focused on bitcoin’s energy consumption is still much debated: there are many experts trying to get people to understand what they see as a logical fallacy, i.e. bitcoin uses “too much energy”. They argue that Bitcoin doesn’t waste energy, it just wastes it Turns into the strongest cash Start.

The hash rate, regardless of the narrative, continues to rise, confirming the fundamental bullish hypothesis of investing in bitcoin.

The opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment has risks – you should do your research before making any decision.

Leave a Comment