BTC and altcoin prices have received negative headlines this week. But sentiment analysis and network data indicate the possibility of a short-term rebound.
March got off to a bad start as concerns about inflation surfaced again. On March 7, heated comments from Federal Reserve Chairman Jerome Powell spurred market expectations for A 50 basis point rate hike at the upcoming March 22-23 meeting.
March 8 US Government $1 Billion Bitcoin
The transfer of assets confiscated from Silk Road has fueled fears of a sell-off. after that day The largest cryptocurrency-friendly bank has confirmed its collapse and plans to voluntarily abandon its digital currency position. The events of the week pushed Bitcoin to a two-week low of $20,050.
A sharp rise in negative sentiment can prevent a rebound.
The bad news and price drop resulted in a sharp drop in CryptoQuant’s Coinbase Premium Index, which measures the difference in trading prices on Coinbase and Binance. Elsewhere in the world, the premium fell to a two-month low on the morning of March 9 as negative news came out.
Chain analytics firm Santiment has reported falling fear, doubt and uncertainty (FUD) in the market, increasing the “chance” of an opposite price rebound during the period. This “moment of disbelief”
However, the funding rate for fixed BTC exchanges remains neutral. without significant liquidation in the futures market It did not show a significant negative bias to imply the likelihood of a short squeeze. The fear and greed index also slipped to a two-month low of 44 but remained above the historical rebound between 10 and 25, indicating that positive gains are likely to be short-lived.
In addition to negative feelings On-chain data also shows positive accumulation between the most important stakeholders, miners and whales. Bitcoin miner holdings have grown since early 2023, heading for a six-month high, Glassnode data also shows. Saw an increase in the number of Bitcoin wallets to more than 1000 BTC.
The perceived price of BTC on the network, representing the average daily dollar run by the Bitcoin network, is currently $19,800. If the price drops below this level May cancel the rise in early 2023 and put the market back into a long-term downtrend.
The Elephant in the Room: Fed Rate Hike
The upcoming Fed rate hike is the most important mystery investors need to solve before they place their bets. A higher print on the CPI on March 14 could send global markets into a risk-free environment ahead of this month’s Fed meeting.
RELATED: Fed Signals Rapid March Rate Hike Due To Inflation – Here’s How Bitcoin Investors Can Prepare
Technically, BTC/USD dropped below the February low of $21,400, triggering a broader selloff towards support at $20,650. If this support is broken The next daily close below this level would be a strong bearish signal.
Negative news gatherings about bearish macro conditions have led to increased volatility in the markets. However, the market’s reaction to the Fed’s CPI numbers and interest rate decision in March remains important to momentum traders.