Bitcoin (BTC) looks stable at the start of a new week after recovering from its drop to $ 43,000 – what lies ahead?
After a 20% drop from full-time employment last week, opinions are divided over what the future of Bitcoin’s price action in the short term might look like. The macro factors are encouraging, but skeptics insist there remains a serious accident.
Cointelegraph highlights five factors that could influence BTC / USD in the next few days.
New incentive, new purchases?
Macro aims to create the perfect storm for alternative assets, led by the United States. President Joe Biden’s $ 1.9 trillion stimulus package has bypassed lawmakers who have given the green light to another incomprehensible massive money print.
The massive increase in dollar supply that has traditionally been a boon for Bitcoin includes direct payments to eligible Americans, this time to $ 1,400.
A third “stimulus test,” or “stimulus,” as it is often called, could easily find its place in the Bitcoin ecosystem if historical trends are repeated this year. As Cointelegraph reported, amounts corresponding to incentive check payments in 2020 began appearing on exchanges shortly after government approval.
Although it was a niche phenomenon a year ago, March 2021 offers a very different range to Bitcoin and altcoins, as prices have skyrocketed and their popularity has grown in recent months.
Combined with the long-standing appeal and controversy over social media-inspired stock trading, the potential impact on cryptocurrencies in the broadest sense of US “free money” could be more pronounced.
“The US is preparing a $ 1.9 trillion stimulus package,” an Ecoinometrics online analyst summed up his Twitter followers. This is more than all the money currently in the US Treasury’s account with the Federal Reserve.
“It is good for Bitcoin.”
DXY Climb promotions
In terms of equities, it began to rise again after the global bond sale last week, which worried regulators.
The same can be said of the strength of the US dollar index (DXY), which has continued to rally since the end of last week, after reaching 89.67. At the time of writing, DXY is measuring over 91 points for the first time since February 8th.
The strong DXY tends to go hand in hand with the BTC / USD rate woes, which has been the case for most of last year.
However, given that the temporary strength of the stimulus package is likely to end, the status quo may not last long.
“I have little doubt that central banks will end up relying heavily on sustained growth in profitability,” Deutsche Bank strategist Jim Reed was quoted as saying in a warning to clients.
“They cannot afford this to happen with such high debt.”
BTC Trader: ‘Relax’
Bitcoin is still heavily focused on social media and other areas.
After hitting a low of just over $ 43,000 over the weekend, the bulls were disappointed that previous lows of around $ 44,000 did not reach the final bottom.
However, based on the astonishing results since March 2020, the $ 15,000 fell from its full-time high of $ 58,300 last month for some to be a near miss.
Michael Van DePope, analyst at Cointelegraph Markets wrote Monday, “Yesterday’s panic was unnecessary. Welcome to the markets, mistakes happened. Part of the game.”
“We keep drawing, bitcoin is just starting. To relax.”
In a recent video update, Van de Poppe indicated that net equity on exchanges is still shrinking, indicating that buyers’ appetite is clearly present at today’s level, and investors are benefiting from cheaper levels of accumulation rather than selling.
“You don’t need to worry about this correction at all, because it’s just a very healthy and natural correction that we’re seeing in the markets here, especially since we only expected a jump from $ 10,000 to $ 58,000 in one question. Months.”
It is important for the bulls to avoid deeper dips as liquidity falls below $ 42,000. If Bitcoin avoids that, there is still a chance it will go up.
“Hard reset” by bearish bitcoin indicators
For Bitcoin accounts, the drop was also positive, not negative. Most notable is the Sput Output Ratio (SOPR), which benefited from the “discharge” as BTC / USD returned to its mid-range of $ 40,000.