This weekly summary looks at changes in the main Bitcoin indicators in the face of shock waves and the banking crisis.
Over the past few days, rising interest rates and the banking crisis sowed doubts in the market, leading the Bitcoin to have strong oscillations for much of the week. In the last few hours, it has again lost the $29K barrier.
Progressively, Bitcoin’s correlation with macroeconomic indicators of the economy is growing and that can be seen through the main Bitcoin indicators and some macro indicators. It is important to bear in mind that for an accurate exercise and analysis of the market, many aspects and scenarios should be taken into account.
Main Bitcoin Indicators
If we take a look at Bitcoin price movements over the last 7 days, it is necessary to point out that the beginning of May started with bearish pressures and a banking crisis. According to CoinMarketCap, Bitcoin’s capitalization increased by 5% over the last 7 days to $560 billion. This could suggest that after the bankruptcy and acquisition of First Republic Bank, Bitcoin is starting to gain relevance again in an economy that is dysfunctional and in crisis.
The price of Bitcoin dropped just before the interest rate hike, reaching a 15-year high. With interest rates at 5.25%, Bitcoin was favored and after the announcement, it ended the day above $29,000 and later oscillated between $28,800 and $29,700. This can be observed in a graphic showing the evolution indicators of Bitcoin last week published by the website CoinMarketCap.com.
Another indicator that should be taken into account for a general analysis is the Fear & Greed, which compiles information from five different sources. In this case, the index has maintained levels similar to 60 points out of 100. At a certain bullish moment, investors tend to become greedy, hoping to take as much profit as possible, throwing feelings or emotional overreactions into the market, alternative.me has been indicated as a top bitcoin indicator.
On the other hand, memecoins has been attacking the major cryptocurrency networks and are the main cause of the saturation of Bitcoin, driving up fees disproportionately.
This case is a novelty for Bitcoin due to the origin of the congestion, although in 2021, Bitcoin suffered one of the worst congestions in its history, with average commissions of around USD 62. It is worth noting that Bitcoin saturation by memecoins is a particular case.
Banking crisis
Nervousness over the expanding banking crisis in the US has materialized, as JPMorgan bought the First Republic Bank which means that this is the second largest bankruptcy in the United States.
U.S. regional banks suffered one of their worst weeks, with most banks facing declines. The fears seemed unfounded, but only during this week; the financial markets began to take the banking crisis seriously.
Expectations
At best, some analysts expect Bitcoin, during this juncture, to touch $32,000. Trader Ninjascalp expects BTC to hover around $29.K. The faster it recovers to $29.2K the better, the trader sentenced.
Both traders seem to agree on one thing, we could be facing a new bull run or the beginning of it. This is information is not intended to be a piece of investment advice, as every person (future investor) should conduct their own analysis and take the above into consideration.
By Marina Meza
