Bitcoin (BTC) was flat at $39,000, until the close on Wall Street on Monday, as stocks took the opportunity to recoup some losses.
Bitcoin price action stabilizes on the first day of a week that should see multiple tests of determination from traders.
Bulls Need a “Miraculous” Recovery to the $40,600 Level
Data from Cointelegraph Markets Pro and TradingView showed that the BTC/USD pair was flat at the opening bell on March 14. The pair recovered from a last minute drop to the weekly close on Sunday to avoid a deeper pullback so far.
However, the week would bring many potential challenges for the bulls, starting with a European vote on banning cryptocurrencies with proof-of-work algorithms on Monday.
Wednesday, nevertheless, was the focus; the US Federal Reserve was due to announce a key rumored interest rate hike of 25 basis points.
Meanwhile, geopolitical tensions surrounding the Russian invasion of Ukraine, coupled with the resurgence of the coronavirus in China, have added to the list of obstacles.
Therefore, traders were lackluster on the immediate outlook, given what the market had to navigate. For Crypto Ed, the 0.618 Fibonacci level at around $40,400 was set to form a local top before a deeper pullback took hold.
Crypto Ed remarked that only a “miraculous” rally to $40,600 could produce a bullish outcome.
Meanwhile, trader and analyst Anbessa highlighted a cutoff point of $37,600 for the bulls to defend.
On live order book charts, on-chain monitoring resource Material Indicators further marked further selling pressure appearing at $40,000 on Monday.
“The new BTCUSDT pair request liquidity that has just appeared seems to be trying to push the price down to the offer scale below. Expecting it to be withdrawn if the offers fill,” the account commented on a chart showing the Binance order book changes.
Bloomberg Analyst: Bitcoin “Cold” vs. Oil
Moving on to longer timeframes, Bloomberg Intelligence Chief Strategist Mike McGlone reiterated his view that Bitcoin would ultimately emerge stronger from the current turmoil.
Bitcoin, he noted that day, was defying an “ebb tide” in demand for risky assets by protecting most of its support.
“The fact that one of the most volatile and best-performing assets since the financial crisis, Bitcoin, shows relative buoyancy in a ebbing tide of risky assets in Q1 may herald the maturation of cryptocurrencies towards digital collateral, in a world that goes that way,” he argued alongside a chart comparing WTI oil to BTC.
Commodities continued to be the biggest movers at the start of the week, while oil futures, however, started to cool off.
Meanwhile, Europe Votes against MiCA, not Proof-of-Work
The crypto community should be celebrating as the European Union (EU) has voted against the Markets in Crypto Assets (MiCA) legislation. The early vote to pass would jeopardize cryptocurrency mining that uses the Proof-of-Work (PoW) algorithm, Bitcoin and Ethereum miners can now breathe more freely.
As known, PoW offers a solid security guarantee to the cryptocurrency protocol; however it has a high environmental cost due to the fact that it requires a lot of electricity to power the machinery necessary for mining, this is the characteristic that some politicians tried to tackle.
After the announcement of the vote results, so far the prices of BTC and ETH have not reported changes, although this situation could be different as the news spreads.
By Audy Castaneda
