Bitcoin stalls after five-day rally but investors ‘have more confidence’

Ethereum has failed to stretch its momentum above the $3,200 resistance

The cryptocurrency market leaves falls this Wednesday, after an impressive five-day rally that has seen bitcoin (BTC) mark a maximum of more than a month above $45,000, an important resistance level for the month of December. The quintessential digital currency has not been able to continue its bull run and sales have entered strongly at this price level, which has caused setbacks below $43,000, a price level where a consolidation movement is expected, despite because the close of February 8 was located at 44,100 dollars.

Overall, the total capitalization of digital tokens has fallen by around 2%, down from the 2 trillion mark it had rebounded on Tuesday. In the ‘altcoins’, the ethereum has suffered the same fate in the last 24 hours and battles with the 3,100 dollars. Despite the fact that the closings of the last two sessions of ether -the unit of the Ethereum network- are above this price level, the minimums of the last four days are in the range of $3,000. This indicates that it has failed to stretch its momentum above the $3,200 resistance, Feb 8 high.

Back to Satoshi Nakamoto’s creation, his historical behavior points to two things right now. On the one hand, the price is expected to enter the range for several days, between 42,000 and 45,000 dollars, in round numbers. And, on the other, it has achieved two daily closes above its 50-day moving average, at $42,500, so the popular cryptocurrency market analyst Lark Davis points to the possibility of hitting a new all-time high this March 2022. .

Davis has mentioned that “the last two times we crossed this line, BTC rallied 54% and 47%. If history rhymes, then we could see BTC rally into the 60K range in the coming weeks.” He further added: “The last two breakouts of the 50-day moving average lasted 40 and 46 days until we saw spikes form for bitcoin price. So new high for BTC at the end of March?” note on Twitter.

“The performance of bitcoin has been really impressive recently, not only because it has broken a key resistance level at $40,000, but because it has done so at a time when sentiment remains extremely volatile in the markets,” he comments. his part, Craig Erlam, analyst at Oanda. “It has run into a little difficulty around $45,500, which was a major support level in December, but it looks like it has decent momentum now,” he adds.

In the expert’s opinion, “we could see some of the recent gains rebound in the coming days, but the cryptocurrency public could suddenly feel much more confident than it has been for many months.”

The current market capitalization of bitcoin is estimated at $827 billion. At the same time, the trading volume of the last 24 hours is about 33 billion dollars.

Bitcoin is in the hands of the Fed and falls to 30,000 are feared if there is a rise of 0.75%

The key will be how aggressive the US central bank is in reducing the balance sheet

The cryptocurrency market maintains its depressed tone of recent days and has chained several sessions in which all digital tokens have not been able to overcome their recent declines. The total capitalization stands at around $1.74 trillion, with the main assets, bitcoin and ethereum, near important support levels, while experts indicate that more suffering can be expected if the US Federal Reserve (Fed) shows its most hawkish side this Wednesday.

The last four sessions have seen bitcoin consolidate its short-term downside and confirm that $40,000 is now the most important resistance to overcome. “The digital asset is hovering around significant support as investors begin to price in much more aggressive Fed tightening,” comments Edward Moya, an analyst at Oanda.

Technical analysis suggests that the world’s most traded cryptocurrency is struggling to break above the $38,800 barrier, falling to near two-month lows in the $37,500 band. If bitcoin continues its bearish drive below the $39,000 pivot level, it could depreciate significantly. However, there is hope as a clear move has been seen above the 23.6% retracement level of the key decline from the roughly $40,350 high to $37,400 low.

However, “the cryptocurrency could continue to decline if the market volatility continues in May,” Moya comments. “The $35,000 level should provide important support for bitcoin, but if the Federal Reserve decides to be more aggressive in tightening its policy, the drop could be heading towards the $30,000 region,” comments the Oanda expert.

On Wednesday, the Fed will discuss a 75 basis point rate hike, but will most likely settle for a 0.5% increase. Just as important is the Fed’s decision to start the balance sheet reduction, in which it could put a $40 billion monthly cap on Treasuries and a $25 billion target on mortgage securities. “They may put a higher cap on balance sheet normalization and that could be a surprise from the hawks that could spark the next round of dollar strength.”

The market has priced in a strong start to the cycle of rate hikes, “but the big question is how aggressive they will be with quantitative tightening,” concludes Moya.

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