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These 5 Factors Will Affect Bitcoin Price This Week

Summary:
Bitcoin (BTC) price enters the new week with only a short distance left to reach an all-time high. After overcoming the weekend in a fairly positive way, the price remained higher without experiencing a deeper price drop than last week. ,000 worked as net support. What’s next for Bitcoin now? EarnForex discussed five factors that could shape the Bitcoin price action in the coming days. Stocks volatility a knock-on effect for BTC An unusual opening is likely for US stocks on Monday as the level of fear in the market had increased over the impact of Friday’s billion block trades. Major players Goldman Sachs and Morgan Stanley gave traders a headache with the unexpected appearance of the orders targeting especially tech stocks. This will end when the market opens on Wall Street

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Bitcoin (BTC) price enters the new week with only a short distance left to reach an all-time high.

After overcoming the weekend in a fairly positive way, the price remained higher without experiencing a deeper price drop than last week. $50,000 worked as net support. What’s next for Bitcoin now?

EarnForex discussed five factors that could shape the Bitcoin price action in the coming days.

Stocks volatility a knock-on effect for BTC

An unusual opening is likely for US stocks on Monday as the level of fear in the market had increased over the impact of Friday’s $20 billion block trades.

Major players Goldman Sachs and Morgan Stanley gave traders a headache with the unexpected appearance of the orders targeting especially tech stocks. This will end when the market opens on Wall Street on Monday.

In a statement to Bloomberg, portfolio manager Sharif Farha said, “traders around the world know the story and will be glued to the screen.” The volatility in stocks means a knock-on effect for Bitcoin, but it is unclear in which direction this will take place.

“Markets could start trading in a friendly manner at the start of the week,” said Andreas Lipkow, a strategist at the German bank Comdirect.

Although there are significant profit-taking and unusual block trading activities, these asymmetrical movements in the market can still be used positively.

Other macro factors include falling oil prices are taking place, but it still does not create pressure for Bitcoin investors as stocks. Meanwhile, the Opec + meeting to be held this week, as well as the solution to the crisis in the Suez Canal, could pull prices down as expectations for an increase in supply rise.

Bitcoin price consolidates at $56,000

The Bitcoin spot markets started with consolidation on Monday. BTC traders felt relieved on Saturday and Sunday after the BTC/USD pair dropped to lows at $50,000.

When the deeper declines were averted, the liquidation, which was feared to occur at $46,000, did not happen and BTC recovered towards the resistance at $56,000. However, at the time of writing this article, Bitcoin is trading above that resistance as the bulls press towards the all-time highs (ATH) of $61,800.

These 5 Factors Will Affect Bitcoin Price This Week

Bitcoin 1-hour chart (Bitfinex). Source: Tradingview

Crypto analyst Michaël van de Poppe said in a review on Sunday:

Some analysts and traders have adopted the wait-and-see attitude after Bitcoin reached its ATH. They claim that the results of the shortage of supply caused by the emptying of exchange reserves and the failure of large investors to sell are not yet felt.

Bitcoin’s April performance dependent on consumer spending

According to on-chain analytics resource Glassnode, performance in April will depend on individual investors rather than institutional investors.

In its recent study, Glassnode highlighted the unusual disparity between US consumer spending and disposable income stemming from the COVID-19 lockdowns.

Although they are normally very close, the start of the lockdown saw the two measures of the purchasing power of retail investors: there was more money due to stimulus checks and other factors, but there was nowhere to spend it.

Now, as the lockdowns are being gradually lifted, pent-up consumer demand is expected to stabilize again.

Commenting on where the stimulus checks will be spent, co-founders Yann Allemann and Jan Happel said:

The blog post that accompanies this view argues that the recent $1,400 incentives are not yet included in the economy.

These 5 Factors Will Affect Bitcoin Price This Week

Disposable income and consumer spending in the USA. Source: Twitter

“The last stimulus package was much larger than it was in January, but this has had little impact on global markets,” Glassnode said.

The extent to which the checks have reached households so far is difficult to measure. More importantly, considering that for a while this was the last financial incentive, it is quite difficult to measure how much the individual investor will willingly spend or save money this time.

Meanwhile, unverified reports suggest that the next incentive checks may arrive earlier than expected.

The relative strength index says Bitcoin will gain more

Bitcoin technical indicators point to strong bullishness over long time frames. Traditionally, higher prices are seen when the relative strength index (RSI) reaches its peak.

Quant analyst PlanB, the developer of the stock to flow Bitcoin price model, revealed how the relative strength index fluctuates according to Bitcoin’s halving cycles.

He said that normally, the most efficient period in terms of price is the year after the halving. He stated that 2021 will not be different from 2013 or 2017.

Meanwhile, the stock to flow model predicts an average price of $100,000 to $288,000 for the BTC/USD pair in the current half-cycle.

These 5 Factors Will Affect Bitcoin Price This Week

Bitcoin RSI chart. Source: PlanB

Fear and ambition index is calm

According to the Crypto Fear and Ambition Index, which is a classic metric of the market, the price increase at the weekend has a significant effect on selling pressure in terms of investor sentiment.

The Crypto Fear and Ambition Index, which gives a result between 0 and 100, shows how the market feels about Bitcoin price movements and determines whether the last activity was a jump from lows or a sell from high.

During the move towards an all-time high of $58,300 in February, the index gave warning signals for the BTC/USD pair. The index, which went up to 94, fell to 38 on March 1. However, days later it was able to return to the ’70s.

These 5 Factors Will Affect Bitcoin Price This Week

Crypto Fear and Ambition Index. Source: Alternative.me

At the time of writing this article, the index, with 72 points, pointed to a sense of “ambition” among investors. However, it says that there is still some time before entering the sales area and that the “excessive greed” area has not yet been reached.

If you have any questions and comments on Bitcoin today, use the form below to reply.


© MarkStevenson for Commodity News, 2021. | Permalink | No comment |
Published under: Bitcoin, Forecasts

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